The foreign exchange currency market, often called “the Forex,” is the world’s largest financial market. Forex currency trading system american exchange trading volume on the Forex is typically more than 1,000 times greater than the combined totals of all stock and equity trading markets worldwide. Becoming an amateur Forex trader is as easy as opening an account with a Forex broker. A few of the largest U.
If you currently have a brokerage account, it’s likely you can begin Forex trading through your stockbroker, in most cases simply by filling out a short online currency-trading application. Once you’ve opened your account, you begin trading by selecting the currencies you want to trade. Currencies on the Forex always come in pairs. As the value of one of the currency pairs rises, the other falls. Most beginning traders should trade only the most-widely traded currencies, such as the U. You may believe that the value of the pound is going to rise to against the U.
USD pair is trading at a bid price of 1. 1510 and at an ask price of 1. This tells you a couple of things. First, that the British pound is currently worth about 1. Note that you always buy at the higher price — 1. 1511 in this instance — and sell at the lower price.
Say you buy 10,000 GBP at 1. If the pound rises to a selling price of 1. 1622, may then sell your position. You’ve made your first profitable currency trade. As you can see from the trade described above, currency trades are highly leveraged, sometimes by as much as 1,000 to 1. Beginning traders may be attracted to the possibility of making large trades from a relatively small account, but this also means that even a small account can lose a lot of money. Your losses aren’t limited to your deposit.