Day Trading

You want to learn more about trading currency for a hobby or even a serious income. It is good to know currency trading basics.

This article will attempt to help you understand currency trading basics. It will help you to understand how it is done and you can decide for sure if you really want to learn more about it.

Although this article will only discuss the basics, there are many other ways to learn currency trading on the internet. There are several courses available to download and others for sale either on the net, eBay or even through local classes.

These are great ways to pursue a more thorough knowledge of forex, or currency trading. Of course it is necessary to point out that currency trading, especially online, carries with it a risk and you need to be prepared to spend only money that you have available to risk.

What is forex? Forex (FX) is an abbreviation of foreign exchange, or the trading of money from one country's monetary value (for example USD) into another country's monetary value (JPY-the Yen). We all know that there is some difference in value if you took your dollar down south to Mexico or across the world to India. You know that before you could spend any money you would need to go to the bank and purchase Rupees or Pesos. Well this is the basis of currency trading. Instead of one person doing it today, there are people who are willing to predict what will happen in either a few minutes or some other time in the future. This is currency trading, and this is the basis of currency trading basics.

The symbols As with the stock exchange there are symbols that represent both currencies in the sale process. It looks like this: base currency (USD)/(Won) quote currency. It doesn't matter if you are buying or selling, one is used to get the other. An example would be if I were going to go to Japan and with my $1.00 bill buy so many Korean Won. This is what that transaction would look like W 1000/$1.00 if it were to remain equal which it never will. I will get 1,000 Won for every dollar I spend.

When we are on the market and want to trade it because you know that for some reason the Won is going to go down and you want to buy it. This means that you will get more Won for every dollar you spend so let's say that it would be W 1,300/$1.00. This means that if I were to spend $10.00 I would get W 13,000 or an increase of W 3,000.

Buying and selling So, what would the spread be? A spread is the difference between the bid price and the ask price written bid/ask USD/Won: W1 250/260. The spread is also the commission the dealer gets instead of a commission. So you want as low a spread as possible.

There is also going long- which is buying currency or going short-selling currency.

So these are just some currency trading basics that you will need to know if you decide to look further into forex investing.

Day Trading |