Introduction to The Foreign Exchange Markets – What is forex?

What is Forex? What is FX Trading & What Does it Mean?

What is forex? This trading course will give you an excellent introduction into the Foreign Exchange Market and the Forex trading! You will learn how to trade forex and how to become a professional trader. This is a great way to learn the basics of the Forex trading, especially for beginners.

Hello everybody,

These are Megan and Madison and we’ll be your host for this trading diary. The diary was set up to allow us to discuss our experiences with you about the capital markets and teach you about the business of forex trading. Each video will be short in nature and touch on one particular topic that will lead you to the next topic in a way to discuss the process of trading the capital markets. Before our first entry into the diary we will discuss the process of becoming a trader and learning about the capital markets in the foreign exchange arena.

Trading the markets is like any other type of business, you want to succeed by making sure that the revenues that you produce are greater than the expenses that you have. Now, sometimes expenses or losses will occur and that’s the way things work in any business. But, you want to make sure that your revenues are consistent and outweigh your losses. Some of the techniques you will use will be similar to making sound business decisions where you will not risk more than you actually have to lose.

Many of the experiences that you will have in the capital markets have to come on your own. By listening to these videos, we will give you a number of different clues on how to succeed, but just like in life to be able to succeed sometimes you have to go through those experiences on your own. For example, think about when you were a kid and you really wanted to climb that big tree outside your house and your mother said: “Don’t climb that tree! The branches are tough and slippery, you’ll fall and break your arm.” While many of us listened to our mother, and many of us did not we climbed the tree and jumped down with the hope that things were going to work out. In many cases they did, in many cases they didn’t. But we all went on to survive and to see the next day.

The next topic we’ll touch on is the largest of the capital markets and that’s the Forex market. The Foreign Exchange market is vast. It’s a 5.2 Trillion Dollar a day market with flows that are moving back and forth across the world. But days are long, they start in Asia and move across the globe with the busiest times in the European trading time zone. The market trades 5 days a week, 24 hours a day and there are some trading currencies that are more liquid than others. The security that is traded is called a currency pair, you’re always exchanging one currency for another. So, in some cases your trading the US dollar versus the Japanese Yen and in many other cases it’s the Euro versus the US dollar.

The most liquid type of trading occurs in the over-the-counter currency market, there pairs are traded non-stop throughout the course of every single day. Futures exchanges are also another place where people trade currency pairs. A currency pair is the price where you will exchange one currency for another, and the most liquid type of currency is the ones that are traded with 2-day delivery in stock market.

Well, that was our introduction into the forex market and some business of forex trading. We really hope you have now a clearer idea of what is forex. We look forward to seeing you next time at the trader’s diary. Take care.

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