1 An Introduction to Forex Trading 2 Forex Forex is the fancy abbreviation for the Foreign Exchange, or Currency Market. The end of the week is defined differently by each broker, but most brokers end the trading week within a few hours of Friday, 5:00pm in New York. When the market closes at a lower price at the end of the time period, the body of the candle is often filled with a dark color (in this case it is black) to indicate a lower close. Reports: Each dealer has different account reports that show all of the trades you have made. Some of them are easy to read, simple and great. There are no rules about selling short, unlike many other markets that make it difficult or illegal to sell short. A spot market is any market that deals in the current price of a financial instrument. The dirty little secret is that the forex market the real forex market where banks and hedge funds and large multinational companies exchange foreign currencies, is not accessible to most traders. When selling, the exchange rate tells you how many units of the" currency you get for selling one unit of the base currency. Because you're not buying anything physical, this kind of trading can be confusing. Easy Account Setup: Account applications at forex dealers are relatively simple. If you are trading larger positions you may call your broker or move to a platform that offers access to the order books of the banks and financial institutions.
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Some of them are buying US Dollars, for example, in order to buy US Stocks, others are buying Australian Dollars in order to buy Australian stocks, still others may buy Euros to keep Euros in a bank account. A chocolate store in France may sell chocolates made in the USA, so the French company will sell Euros and buy US Dollars in order to pay for the US chocolates. In the OTC market, participants determine who they want to trade with depending on trading conditions, attractiveness of prices and reputation of the trading counterpart. If we say that we are going short on the EUR/USD, then we are saying that we are selling Euros and buying dollars. In the next section, well reveal what exactly is traded in the forex market. This forex market is quite unique as far as markets go these days. To 1/100th of yen, as opposed to 1/1000th with other major currencies). So you see, the forex market is definitely huge, but not as huge as the others would like you to believe. Its these changes in the exchanges rates that allow you to make money in the foreign exchange market. The initial requirement was that you could trade only if you had about ten to fifty million bucks to start with! Many traders use candlestick charts to attempt to predict where price will go in the future and this is how many traders make money.
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What Does it Cost to Trade Forex? Here are a few things you can have in mind when choosing a forex dealer:. Pip stands for "Price Index Point" and is the smallest increment of trade. The margin requirement allows forex traders to hold a position much larger than the account value. Sell Short: Currency trading is very different from stock trading in that you can sell a currency short just as easily as you can buy. My one dollar is worth 100 yen?! They are all pretty good. No clearing fees, no exchange fees, no government fees, no brokerage fees. Your currency dealer likely has hundreds, if not thousands of trades on its books at any given time.
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Which Currencies Are Traded? This means that you now have 1,000 left in your account as available margin. Then, his forex dealer proceeded to sell the pair down, lower and lower, accumulating a position of millions of dollars in the process (although this bit of logic is usually omitted from the story). Home Kenya Nairobi Pipsology Forex Learning Academy and trade signals services. Instead they just have a slightly wider spread between bid and ask (buy and sell) prices. The rest of the forex market is made up of all kinds of speculators. If you want to sell GBP, you click "Sell" and you will sell pounds at If you want to buy GBP, you click "Buy" and you will buy pounds at 10 How a Forex Trade Works Placing a trade. This type of candle is known as a bearish candle. Forex trading is the simultaneous buying of one currency and the selling of another. 8 The chart below shows global foreign exchange activity. 18th June 2008, 05:24 pm, school of Pipsology is a PDF version of the free on-line web course.