So what is forex currency online trading? You must know of the foreign exchange from when you go on holiday and change money up. You will often hear people say, “I got a good rate for the dollar yesterday.” The rate is constantly fluctuating on a daily basis but to the foreign exchange it is not that noticeable only a few pence here and there over long periods of time.
With forex currency online the fluctuations are much more noticeable because we are also trading the last two decimal places, on the dollar that would be a tenth of a cent. The forex or currency market works in pairs, one currency being traded against the other E.g. GBP/USD the British Pound against the U.S. Dollar the price of this currency pair may for example look like this 18500. This is the amount of U.S. Dollars one British will get, $1.8500.
The last two decimal places is what we are going to bet on going up or down. These last two decimal places in forex currency trading online are known as pips or points. You can bet anything from £1 a pip to £1000 a pip, even more depending on the spread betting platform you use. In this example to keep things simple we are going to bet £10 a pip.
The price has opened at 18500, after studying the technical data and fundamental data made available to you; you decide that the price is going to go up, the GBP is going to strengthen against the USD. The price does go up to 18550 ( 50 pips or ½ a cent). Although this price is fairly insignificant on the foreign exchange market, unless you where changing 1000′s of pounds at your local travel agent it would not be noticeable but in the forex market you have just made a £500 profit.
The forex market is the most volatile financial market in the world and because of world time zones it can be traded 24 hours a day. Many people are starting to trade forex currency online from their homes because of its instant results. It does however require some training to be successful and it is recommended that you first attempt to trade with a demo account before you venture into real money trading.
By: Adam Woods
About the Author:
Adam had been trading forex for 4 years with little success. Adam originally had no knowledge of the forex markets so he joined Colin Atkin’s private members club. Colin is a professional trader who shares his trading live, over a webinar three times a day 5 days a week, all you have do is copy what he does and take the profits. Since Adam joined Colin he has had the money to invest in other projects and gone on to be a successful full time forex trader and internet marketer.
