| Forex trading is the simultaneous buying of one | | | | is not the backlog of orders or excitement over |
| currency and the selling of another currency. | | | | breaking news stories that affects the open of the |
| This continuously changing number financial system | | | | stock exchanges. The market in the traditional sense |
| was launched in the 1970s. It is now the largest liquid | | | | does not exist since there is no central trading |
| financial market today with daily trades totaling well | | | | location. The main currency market is the "interbank |
| over 1 trillion dollars. The New York Stock Exchange | | | | market" where large institutions deal with the risks of |
| is not nearly as large as the Foreign Exchange or | | | | the fluctuations of the values. The "spot market" is |
| Forex. | | | | the market for the buying and selling of currencies at |
| Trading | | | | the prevailing price. The Forex ECN provides an area |
| Forex is a true 24-hour market, which offers a major | | | | or marketplace for traders to buy and sell very |
| advantage over equities trading. Forex transactions | | | | similar to a giant department store. |
| take place online anywhere in the world around the | | | | Trade |
| clock. The market activity starts in Sydney, Australia | | | | Trades can happen very quickly in seconds or take |
| and moves around the globe as various financial | | | | months to complete. The trader must secure a profit |
| markets open around the world. Trading is not limited | | | | from the purchase and sale of the currency. This has |
| to a centralized location like the Stock Exchange or | | | | spawned a technology allowing the trader to |
| Futures Markets. | | | | automate a lot of the process. The traders that are |
| Currency | | | | consistently profitable are those that have done their |
| Currency exchange trading involves buying and selling | | | | homework and understand the risks involved. By |
| two different currencies simultaneously. Markets are | | | | entering a trade, you are gambling the price will |
| primarily affected by international trade flows and the | | | | change in your favor by an amount that will allow |
| flow of investment currency. Prices are quoted in | | | | you to break even or make a profit. If you decide to |
| pairs with a "Bid", and an "Ask" price completing the | | | | close a trade because of an unfavorable position, you |
| quote. | | | | stand to lose the spread also. |
| The "Bid" price is the price the Dealer will pay or the | | | | Price. |
| Trader will sell for the currency. The "Ask" price is | | | | The price of the trade can be as little as one |
| the amount the Trader will pay or the Dealer will sell | | | | hundred to several thousand dollars and can move in |
| the currency. The quote on some currencies are | | | | a direction that will either favor or hurt your position. |
| dependent on the US Dollar such as the Euro, British | | | | Price graphs are used to monitor this movement. A |
| Pound, and the Australian Dollar to name a few. | | | | "pip" is the smallest amount the price can change and |
| Market | | | | us used to reference the movement of the value of |
| The foreign exchange market never closes so there | | | | the currency. |