WHAT IS FOREX TRADING?

Forex trading is the simultaneous buying of one currency and selling of another, for example, buying Euros and selling U.S. dollars. The price at which this is done is the spot foreign currency exchange rate. If you have ever exchanged foreign currency at a bank or airport, then you are already familiar with foreign currency exchange rates. It is nothing more than the value of one currency in terms of another currency.

Earning profit from forex trading is just like earning profit from trading any asset: you want to buy low and sell high, or sell high and then buy back low. For example, if a forex trader believes that the Euro will weaken relative to the U.S. dollar, then the trader can sell Euros against U.S. dollars. This is referred to as being "short Euros against the dollar" which, from a forex trading perspective, is the same as being "long dollars against the Euro". If the Euro weakens against the dollar, then the position will profit.

Now, if you had no choice but to buy or sell foreign currencies with the teller at your local bank or at a public currency conversion center, then it would be very difficult to earn profit because of the wide currency spread charged by these institutions. What is needed is another way, a better way for an individual investor to trade foreign currencies and this is what the retail forex market provides.

THE FOREX MARKET

The forex market is an over-the-counter market for buying and selling foreign currencies that began out of necessity from burgeoning international trade and investment and has since grown to become the largest, most liquid market in the world. It is a wholesale market whose participants are primarily large banks and other financial institutions that deal in a typical transaction size of $5 million and this put the forex market outside of the participatory reach of the retail trader until very recently.

Thanks to modern technology and industry innovation, a retail forex market has emerged that shares many of the trading advantages of its wholesale counterpart. Individual traders such as you and I participate in the retail forex market through the online forex trading platforms provided by the forex broker. These platforms allow traders to deal quickly and easily on a relatively tight bid/ask spread even with a small transaction size, thus opening up a whole new world of possibilities for efficient forex trading.

This free online forex tutorial is a great next step for the forex beginner. Just sit back and relax and receive an hour's worth of excellent and extensive forex content that starts with the basics.

As a forex beginner, it's important to know that forex trading should not be done impulsively. Rather, it must follow the rules of a well-defined trading system. A trading system specifies when to get into a trade, either long or short, and when to close a trade, either at a profit or at a loss. A trading system must be appropriate for you. Every forex trader has their own tolerance level for risk and amount of available risk capital and the trading system needs to be consistent with these parameters. For more information on trading systems, request our free brochure, How to Invest.

Do you have your own idea for a forex trading system? Maybe you’ve spotted a pattern in price activity. It could be a day-of-the-week effect, a time-of-the-day effect, or a new relationship with other, related markets. Many of us have ideas but have been stopped short by the daunting task of translating that idea into a trading system and then properly testing that system. While many trading platforms such as NinjaTrader, MetaTrader and AIQ have become fairly sophisticated in their application for system design and testing, it seems that a trader needs to be part programmer in order to take full advantage of them - and many of us are not. Our custom trade system programmer can help. He has coding and programming experience with all of the major trading platforms and is even a trader himself. He can translate your idea into a forex trading system and then test it. The result may be a fully automated, personalized trading system that generates investment income for years to come.

As a forex beginner, you might have a question about forex trading. if so, then speak to a forex trading professional. They'll help you decide if trading forex is right for you. Go ahead and Talk to a Forex Professional in the box above.

Did you know? There are many ways to trade foreign currency. The forex market is just one way. You can also trade futures on foreign currency, trade options on foreign currency futures and even trade binary options on foreign currencies. As a forex beginner, you may want to study all of these approaches and decide which might be best for you.

Finally, before you trade forex with hard-earned dollars, we recommend that you start in a forex demo account. This simulated trading account is free and a useful educational tool especially for the forex beginner. The professionals at The Futures Training Division of PFGBEST who provide this forex demo account are not only willing to spend the time in helping the beginner, but they can also help you set up a real account when you're ready, making the transition to actual forex trading easy and stress-free for you.

While this web site was designed to be accessible to all, especially the forex beginner, that is not to say that forex trading is appropriate for everyone. As with any type of investment, it should be carefully considered along with your personal tolerance for risk and available risk capital. This web site will help you make an informed decision.

Forex Trading Books...

Professional Forex Trader Library. Receive over 15 hours (8 CD's) of our best forex trading education in one package! From topics for the forex beginner to our more advanced courses, this package will work synergistically to increase your trading knowledge and propel you to trading success. This comprehensive course is delivered to you at your own pace through a multi-media CD-Rom series with complete navigation and online testing capabilities.