Forex or FX trading is a way of making money from currency price movements. Forex traders buy and sell world currencies according to whether a currency seems likely to rise or fall.
Who Can Do FX Trading?
When you first hear about currency trading you might think that you need to know a lot about economics, politics or finance. You might think that all forex traders would be employed on Wall Street or other financial centers of the world. But this is not true at all.
In the past, it was certainly the case that the foreign exchange markets used to be almost entirely dominated by banks and investment companies. These days, however, all of that has changed. There are two main reasons for this.
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Forex pairs are always involved in currency trading. The pair is the two currencies involved in your trade. For example if you are exchanging US dollars for Swiss francs, the currency pair is USD/CHF.
Theoretically you could trade any two currencies of the world, but in practice most foreign exchange trading is limited to the currencies of the larger financial powers. This does not necessarily mean the biggest or most politically powerful countries. Switzerland for example is only a small country but is a major player in the financial markets because of the global importance of the Swiss banks.
There are 6 major forex pairs which between them account for 90% of the funds traded on the forex markets. These are:
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Forex technical analysis is one of two ways to analyze the foreign exchange markets. It works by studying the movement of prices, while the other method, fundamental analysis, looks at external economic factors such as the strength of the national economy, political events and so forth.
Studying price movement with forex technical analysis involves charts. The theory of it is that if you look at the historical records of how prices have moved in the past, you can identify tendencies and trends which will mean that you can predict how the prices will move in the future. Then as soon as you spot an emerging pattern that fits your system, you have a trading opportunity.
There are three types of forex charts:
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Your first foreign exchange tutorial will cover the basics of what you need to do to get started with forex trading. The aim, of course, is to have you making money by predicting the rise and fall of one currency against another and opening and closing your trades at the right moment.
It takes time to learn to be a successful forex trader but you can cut corners if you have a good introductory program that covers everything you need to know. This includes:
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Forex managed accounts present an attractive opportunity for people who want to make money from the lucrative currency trading markets but cannot or do not want to learn to trade for themselves. With a managed account you do not have to do any trading at all. Instead, you entrust your fund to the management company who will act for you.
There are two basic types of forex managed accounts.
1. Standard accounts
With this type of account, your money is kept in your brokerage account in your own name and the manager simply has control over it so that they can trade with it. You can see how much is there and how it is doing at all times. It remains your money.
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