learn forex trading online

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By ktharri


forex currencies

Photo from http://www.flickr.com/photos/dvdmerwe/94669546/
Photo from http://www.flickr.com/photos/dvdmerwe/94669546/

Learn forex trading online - beginners guide

If your thinking about learning forex online, then learning about how the markets work should be your first priority. The tools of the trade can seem complex at first, but once you've got the hang of them it really is simple to make trades. Fortunately your education can be free, any decent forex trading software will have some sort of free demo account, in which you can practise with play money but on real prices and data. To make the most of your demo and to speed up your education, you need to understand how it all works.


study the forex numbers - how does forex work?

In forex the information you are given looks something like this:

USD/EUR 0.7995/0.8000

The first currency(USD) is the base currency, its value is always “1”. That means that one unit of the base currency is worth however many cents and dollars are displayed to the right of the secondary currency. In each number, the final digit(shown in bold) is called a pip

The first number is the BID price, the second number is the ASK price. The BID price is the price at which you can sell the base currency. In this case you would get 79.95 euros for every $100 you wanted to sell. The ASK price is the price at which you can buy the base currency. In this it would cost you 80 euros to buy $100.

Having two prices protects the company you are trading with from fast moving markets, but the difference between the two prices is important, as the larger it is, the harder it is for you to make money.

To show an example usuing the data above. If you though the US$ would go up in value against the euro, you would buy USD at the ASK price. Assuming you were right and the USD went up, both numbers would rise, and when you thought it was time to cash in, you would have to sell back your usd at the BID price. 

PIPS!

As you may have noticed, this means that the base currency has to improve 5 pips before you have made a profit. This is why it is important that you choose you broker, and even your trades carefully. Profit is still very possible, as over a week currencies may change value by hundreds of pips.
If you can get on the right side of that movement, you can make profits trading forex online, as many people currently do today. For a review of forex brokers, or just for a good place to learn forex online check out my site dedicated to teaching beginners the basics. 


I hope you have found the above information useful, good luck with your trading and remember to keep up your training

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