FOREX stands for the FOReign EXchange market, which is an international financial market where currencies are traded. The foreign exchange market began in the 1970s and is now the largest financial market in the world, with an average daily turnover of US$1.9 trillion. That’s thirty times the amount of daily activity on all of the US stock exchanges.

Each Forex trade involves simultaneously buying one currency and selling another. For example, if you think that the Euro will rise relative to the dollar, you would place a Euro/Dollar trade. The forex system would then buy the Euro and sell an equivalent amount of the Dollar. Then, when you want to close your position, you would place a Dollar/Euro trade. This would buy the Dollar and sell the Euro. If the Euro had risen against the Dollar, you would make a profit, but if it had fallen relative to the Dollar you would make a loss.

What currencies are traded?

Most of the world’s currencies are available to trade, but the majority of market action involves a group of major currencies, including the US Dollar, the Euro, the Yen, the Swiss Franc and Sterling.

Where is the Forex market located?

Unlike most financial markets around the world, Forex is not centralized on an exchange. Instead it operates on a basis known as the interbank market or Over the Counter (OTC). As each Forex trade involves two reciprocal trades (buy one currency and sell another), these are conducted electronically with any broker who is willing to accept the trade.

Who can trade in the Forex market?

Traditionally, access to currency trading was restricted to banking organisations, including central banks, commercial banks and investment banks. That’s the reason it operates on a system known as the interbank market.

However, the number of non bank participants in the Forex market, which includes multinational companies, money managers, money brokers and private speculators, is growing rapidly. And thanks to the relatively small amount of capital required to open a trading account (often $500) Forex is opening up to more and more people all the time. If you’re over 18, have internet access the enough money to open a trading account, the world of Forex is open to you.

When is the Forex market open for trading?

As Forex doesn’t exist within a traditional exchange, it’s the only 24 hour financial market in the world. Forex trading begins every day in Sydney and then moves around the globe as the major international financial markets in Tokyo, London and New York open.

In other words, there are always traders somewhere in the world who are actively trading foreign currencies. This means you can make trades and respond to major social, economic and political events day or night. However, there is a short rest period from close of trading on the American financial market on Friday until trading begins in Australia on Monday morning. However, due to the time differences around the globe, this period only lasts for approximately 48 hours.

What is a trading margin?

Forex trades are made in lots of $100,000. If you had to provide that amount of money to cover your position before you could trade, the market would once again be restricted to banks and other institutional investors. So brokers have established the principle of margin trading. In effect they allow people to trade $100,000 blocks of currency if they can provide an element of security against potential losses.

For example, they may allow people to trade on a margin of 1% (in comparison, traditional stock brokers often require a 50% margin). This means that they can trade $100,000 blocks, provided their account contains at least $100,000 x 1% = $1000. One thousand dollars will protect the broker against any potential losses that their client makes (currency values rarely fluctuate by more than 1% in a single day). If a client’s account is reduced by losses (i.e. reducing the broker’s security below acceptable levels), the broker will close all trades and require an additional deposit before further trades can be made.

Trading margin allows people to control vast amounts of currency wiith relatively small amounts of capital (often 50, 100 or even 200 times the amount of capital that they have invested). This can lead to massive gains, but increases the risk of losing most or all of your investment capital.

How much does it cost?

Thanks to the trading margin offered by most Forex brokers, it’s possible to open an account and get started trading with a relatively small amount of capital.

Forex trades are made in lots of $100,000. However, most Forexs brokes will provide you with a leverage ratio of up to 100:1, which means that you have the ability to control a $100,000 trade with as little as $1000 in your account. Some brokers will provide leverage of 200:1 or even 400:1, which allows you to start with as little as $500 or $250 in your account.

However, please remember that although greater leverage allows you to maximize your profit potential, it also increases the risk factor. The higher the leverage ratio, the smaller trading fluctuation that will be required to wipe out your trading capital. So choose the amount of leverage that you use wisely.
For new traders, it may be safer to begin with leverage of 20:1 or 50:1. This will increase the amount that you need to open an account, but it will reduce the risk of seeing all your trading capital disappear due to a small shift in the value of a currency.

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300 Dollars to trade

Hey!! Listen to this ” YOU CAN TRADE FOREX EVEN WITH 300US$” .This account is called MINI Account where in you trade small,so as to keep your risk small and after you get the feel of the System and the Market you can trade a Major, for which the Minimum amount is US# 1000 FOR 1 Lot

Demo Account

Already Tense!!!Do not worry if you do not want to risk your money you can trade with Dummy Money.This Facility the broker provides you and you get the real terminal and you Trade Real Charts with the Dummy Money .Once you feel perfect and feel the trading terminal you can pump real money.

Free Charts

The Broker provides you with free charts, and if you want more facilities and tools called INDICATORS in Forex parlence,you can go for the paid ones.

Forex Course Forex Systems and Forex Books.

You Do know that to start any business you need to know the fundamental facts,Similarly in order to trade you need to Know about Fores chart,indicators and technical analysis and some other tools.There are many different approaches to forex trading and hence the availability of many Forex Courses ,Forex Systems and Books,

Practise

You can practise the Demo account with the Dummy Money and trade in real time and test your skills and when you feel that you have learnt all the basic tools and systems you are comfortable with .Then you can proceed to trade with REAL MONEY!!

Buy or Purchase some course materials.

Buy some basic Books and systems and become familiar wit the system

Risky

Remember as with any business ,there is risk attached to forex trading so please do not trade beyond the amount which you can offored and do not trade with fear money ,means money which is required for you and your family needs for survival ,you only trade with surplus money

“TAKE ACTION” come start your preparation from this moment ,do not postpone the issue , if you trade with common sense then there is a scope to earn money from Trading Forex Online

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