There’s currently a lot of interest in forex trading, but as with stock market trading, it’s not something you can quickly learn by watching a video demonstration or a few guide articles. Aspiring traders must first become familiar with the global financial landscape and understand both how currencies work and how they’re traded to benefit from forex.
As your forex broker, Fair Forex will help you navigate the complex world of foreign exchange markets. Below is a brief introduction.
Forex or foreign exchange is the global activity of buying and selling foreign currencies. The market is decentralised and takes place electronically over-the-counter (OTC).
Ordinary individual traders who trade currencies using personal accounts created via brokers like Fair Forex are called retail traders. Then there are the institutional traders: banks, hedge funds, pension funds, investment firms and huge commercial corporations with very large trading capital. They self-manage their funds or manage the funds of their clients. Institutional traders can influence the market because of how massive their funds are.
Here are a few more terms you need to be familiar with and are excellent starting points for learning forex trading:
Here’s the simplified version of how forex traders earn money: they buy a currency at a low price then sell it at a higher price.
There are so many factors that come into play, however, that can affect a trader’s profits or lack thereof. The historical performance of the currency pair and the individual currencies; any sudden economic or political turmoil in the countries of origin; the market being bullish or bearish, and your decision to take the long or short position can all affect your investment.
Ideally, a forex trader should take the time to study how the market works and learn the histories of the currencies they’re interested in. They should also be up to date on global financial news and current events. It’s only when traders have a clear grasp of currency behaviours and know which indicators to refer to that they can generate profits from their trading activities.
If it is your first time trading foreign currencies, Fair Forex is an excellent place to start. We offer some of the industry’s lowest commissions and spreads. Clients can also open an account with a deposit for as low as $50.
We’d love to show you more about the types of accounts you can open and the trading tools we provide for free. Contact us today, and one of our team members will get back to you as quickly as possible.