Forex Currency Trading

What is FOREX Currency Trading?

If you've ever looked into Investing your money in any type of Market you've probably come across FOREX Currency Trading. While it's not widely known outside the web world, inside it's shouted as a great way to make money the easy way from home.

FOREX is simply an abbreviation of "Foreign Exchange"

Until the mid 90's FOREX was pretty much limited to Banks and large institutions, this was because the complexity of trading foreign currencies & the amount of money you needed to enter the market.

Since then with the development of the Internet and web based trading platforms literally anyone with even just $1 can start trading FOREX from their Home PC.

Unlike the stock market with FOREX Currency Trading you buy and sell matched "pairs" of currency. The currencies you can buy and sell are paired up for you such as USD/JPY, USD/CAD, AUD/USD.

When You BUY say USD/JPY you are betting that the Dollar will be worth more than the Yen when you "close" the transaction. In the same sense you can also SELL the USD which means you antiocipate thh dollar will DROP in value VS the Yen whtn you "close" the transaction.

So unlike the stock market where you need a certain amount of buying power to "short" stocks (shorting stocks must be done on a margin due to the inherit risk) you can short/sell FOREX the same way you buy it.

Here's a Few Things That Make FOREX Currency Trading quite different than the Stock Market and other markets:

• You "Short" currency the same way you buy currency.
  
  
• You "Close" your transaction when you want to take profit or get out of a position.
  
  
• You can leverage up to 1:400 of your money. Meaning you can take $50 and have the buying power of $20,000. You can make money extremely fast this way, and you can also lose it.
  
  
• Unlike Stocks you can "Short" forex currency and not be negative on your margin due to required Stop-Loss gain/loss which can not exceed your current account balance
  
  
• You don't pay commission for every purchase or sale (there are a few brokers that work this way 99% don't) you pay the difference in the price of the currency (known as PIP's), this is what the broker collects as their fee, which can range from 1 PIP to 20 (most good brkoers are in the 2-3 PIPS range).

While Forex Currency Trading has the ability to net you a large amount of profit you can also lose your shirt just as fast.

One of the nice things about FOREX Currency Trading is most brokers let you demo FOREX with a preloaded virtual money account so you can practice your trading ability.

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