What is Forex?
Forex is the foreign exchange market where currencies are traded from various countries that have a value and change it. Most people know about Forex as much as they needed to make its currency exchange when traveling outside the country of travel reasons or shopping. When they did, they unknowingly were part of the largest markets in the world. Forex trading revolves over $ 3 trillion a day, which exceeds the largest and best known stock exchanges / markets in the world.

The word "market" usually provides a picture of a shopping center like New York or London, where they exchanged goods and services. This is not the case with Forex. Instead, the Forex works through what is known as the "interbank" market. Interbank is a nice way of saying that banks trade among themselves, outside the central market place. This is one of the main reasons why the volume of data is not available for Forex. It is also the reason why smaller investors and traders-individuals''other side''so long.


With what you trade on Forex?
The answer is simple - the money! Forex trading is the simultaneous buying of one currency and selling another. Currencies are traded through a broker or dealer, and are traded in pairs such as Euro and U.S. dollar (EUR / USD) or the British pound and Japanese Yen (GBP / JPY). Because you are not buying anything physical, this kind of trading can be confusing. Consider buying a currency as buying a share in a particular country, that its economy. When you buy, say, Japanese Yen, essentially buying a share in the Japanese economy, since the price of currencies direct reflection of what the market thinks about the present and future''health''of the Japanese economy.

Unlike other financial markets, such as the New York Stock Exchange, the Forex market has no physical location (address), or a center of trade. By the late 1990s, the only "big guys" could play this game. However, because of the Internet, online Forex firms (brokers) are now able to offer trading''small''retailers like us. All you need to get started is a computer, high speed internet access, and information, some of which can be found on this site.


Why do we trade the Forex?
There are many benefits and advantages to trading in the foreign exchange market. Here are just a few reasons why so many people have chosen this market:

No commissions: You do not have anyone paying commissions - no stock, no country, nor broker. Brokers are compensated for their services through something called the difference between supply and demand, ie buying and selling price.

No middlemen: Spot foreign exchange trading eliminates the middlemen, and allows you to trade directly responsible for market prices in a particular currency pair.

There is no fixed size of the order (lot) for purchase and / or sold: in the options market, lot or contract sizes (orders) is determined by the terms of trade. For example, a standard order options to silver is 5000 ounces. In the forex market, you specify the size of your order. This allows traders to participate in the market with accounts from $ 250 for most brokers, although there are a broker where the minimum bet 1 USD! Later I will explain why you believe your account with such a small initial stake a bad idea.

Low transaction costs: the usual transaction cost (the bid / ask spread) is typically less than 0.1% under normal market conditions. At larger dealers may be lower, around 0.07%. Of course, it depends on your leverage, which will be further discussed later.

24-hours a day: No waiting for the opening bell - from Sunday to Friday 24.00 to 22:00 the Forex market never sleeps J. This is great for those who wish to trade in his spare time, because you can choose when you want to trade - morning, afternoon or night.

No one can affect the market: the foreign exchange market is so huge and has so many participants that there is no force (not even the central bank) that can control the market price for a longer period.

Leverage in the Forex market using a small margin deposit can control a much larger total contract value. Leverage gives the trader the opportunity to achieve a nice profit, while at the same time keep risk capital to a minimum. For example, Forex brokers offer leverage at a ratio of 200:1, which means that with a $ 50 deposit trader can buy or sell currencies in the amount of $ 10,000. Similarly, with $ 500, you can trade with $ 100,000 and so on. But leverage is a double edged sword! Without proper risk management, this high degree of leverage can lead to large losses as well as gains

High liquidity: Since the Forex market is so huge, it is also extremely liquid. This means that under normal market conditions, with the click of a mouse you can currently buy and sell at will, ie, there is always supply and demand and can not happen if you decided to''come out''of trading that you do not have to sell to your trading pair, ie that "stuck" in the trade. You can even set your online trading platform to automatically close an open position at the desired level of income (a limit order, or take / profit), and / or close if the trade goes against you (stop loss order).

Free "demo" accounts, news, charts, and market analysis: Most online Forex brokers offer 'demo' accounts to train trading with Forex news and graphs. All free! These are very valuable resources for "poor" and the smart traders who would like to try out their trading skills with virtual money before opening a real (live) account and risking real money.

"Mini" and "Micro" Trading: if you think that it would start trading on the foreign exchange market should be a truck full of money, you are wrong! The fact is that, compared to trading stocks and options, it is not the same. Online Forex brokers offer "mini" and "micro" trading accounts, some with a minimum deposit of $ 250 or less. Now you are not suggesting that you should open an account with a minimum deposit, but this is what makes Forex accessible to the average (''poorer'') an individual who does not have an initial capital for trading.
How much would it cost me to start trading in Forex?

Online currency account (the "micro account") may be open but with a couple of bucks. Do not laugh - micro and mini account is a good way to try in the world foreign exchange markets, not to lose all of their hard earned money. For a micro account, my recommendation is at least $ 1,000, for a mini account would recommend at least $ 5,000 to start. You can start with smaller amounts, but keep in mind about money management, regardless of the amount of bets on your account (more below). It is recommended that at a trade does not risk more than 2-3% of your account.