Foreign exchange, more commonly known as Forex is currently the largest market in the world, having trillions worth of currency as turnover on a daily basis. It is not surprising that a lot of people want to get in on this market. One could rack up huge profits with relatively low capital, but on the other hand, you can also experience just as much loss.

The concept of trading Forex is simple. You buy and sell a different currencies, which value constantly rise and fall depending on the exchange rate (the price of a given currency in one country compared to another currency). These exchange rates vary from country to country and are crucial if one wants to maximize profits. Once the exchange rate raises the value of the currency they bought, they sell it with its increased value.

Traders can choose any type of currency to buy and sell, but the most common choice would be US dollar (generally accepted over the world) and the local currency of their own country.

For example, a US dollar is worth 50 Philippine pesos, so you trade 1,000 dollars for 50,000 pesos. After some time, the exchange rate increases the value of the peso, and one US dollar is now 40 pesos. This means that the 50,000 pesos that you currently have is now worth 1,250 dollars. You trade the pesos back to US dollars, and you gain 250 dollars worth of profit. This does not look that impressive on such a small scale, but when buying or selling with larger amounts of money, the profit becomes more evident.

However, the exchange rate does not always go in favor of your currency. For example, starting again with a 1 to 50 exchange rate, you again trade 1000 dollars for another 50,000 pesos. However, the value of the dollar rises due to certain events, and the exchange rate becomes 1 to 60. You decide to trade your 50,000 back and get only around 833 dollars. You just lost 267 dollars. That is what makes the Forex trade risky.

Fortunately, there are lots of ways to help people start trading money and minimize losses. Constant analysis of your country economy (and the country which you want to change currencies with) can give you an idea of future exchange rates, letting you determine when to trade properly. There are also financial institutions that allow you to make a mock account that simulate real world exchange rates to help you get experience in the foreign exchange market without having to invest real money. By relying more on skill than purely on luck, the for

Get a greater understanding of automated Forex trading and check out what’s going on with the Forex Robot World Cup by visiting our website today.

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Why dosen’t America have one currency similar to the Euro in europe?

Canada and the US could have one currency trading block

I am pretty sure that in the interest in national sovereignty the Canadians would be reluctant to trade in their dollars for our dollars, and we can rest assured that the US will never abandon the independent Treasury that James K. Polk set up way back when for Canada’s devalued dollars. A unified currency would be a step in the direction of Americanization of Canada and I just do not think that there is enough of a demand to get decision makers to even give it time to think about.

UBS’s Mohi-uddin Says Euro May Decline to $1.30: Video

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I know something like the concept price action and trading without indicators gets lost in the current trading world that we live in now. When the trading community goes insane over the latest flavor of the day. In a trading world that has all these brand new indicators, trading robots, state of the art trading software, etc… we are definitely in a time of style over substance.

The idea of just looking at a naked chart (no indicators) probably doesn’t appeal to a whole lot of people. They are probably saying “what am I supposed to be able to see looking at that?” And my answer would be everything.

Without all the filler and the other b.s. that goes on a trading chart nowadays, you get to see the market in its most real form. With price action you get to see:

The Trend - You always hear about people saying trade with the trend. Well, frankly I don’t know any other way to spot the trend without looking at price action. I can assure you that moving averages don’t cut it.

Support and Resistance Areas - Once you know what to look for, its so obvious to spot. A basic bar chart is like an x-ray of the market. It tells you exactly how traders are reacting to the price movement, and within the reaction, it is clear that there are spots in the market that traders are waiting for.

The Future Price - It all boils down to the fact that all markets have price action patterns that are repeated over and over, which can be used to forecast and predict future price movement. It goes back to the old adage “those who fail history are doomed to repeat it“

John Templeton has been a successful forex trader after learning how to trade price action. Once he understood that all he needed to trade forex was on a plain chart with no indicators, his profits soared.

GFTs DealBook® How-to Video: chart zoom features

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