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An Introduction to Forex Trading
Learning foreign exchange trading can enable you to set up your own business as a broker. The foreign exchange market is the biggest international market in terms of volume and trading. Being a successful trader requires an in-depth knowledge of foreign exchange dynamics and trade. To know more about this challenging and profitable career, read on.
Read more at In 1971, foreign exchange currency rates switched from being fixed to floating and a new market opened up. The currency conversion rates between two countries were now subject to the trading volume between them and their respective market dynamics. Since then, foreign trade and therefore, foreign currency exchange trade has grown by leaps and bounds, reaching a turnover of USD 3.2 trillion in 2007, with a 71% increase since 2004. This type of trade became a new business opportunity which exploited the volatility of the exchange rates for profit. 

Today, the foreign exchange market is not only the biggest international trade market, but is also the longest running, operating 24 hours a day, except weekends. This makes it more sensitive to international events and therefore more responsive to market changes. 

Learning forex trading is about learning how currencies are exchanged and it requires an in-depth knowledge of economic developments in the international markets, as well as domestic markets. The fundamentals are simple, but acquiring mastery over trading requires years of experience. Trading in this market is usually done on the phone and nowadays, largely on the Internet. You can trade from anywhere in the world. All you need is an Internet connection, a decent capital investment, and a willingness to learn. The cost of operation through the Internet is lower and also faster, compared to traditional methods. 

Learning Trading

Trade in all forms is the buying and selling of goods. The principle on which it operates is 'buy cheap, sell dear'. Forex trade is unique in the sense that there are no goods sold here, only currencies are swapped, one for the other. The principle of operation is the same though, 'Buy a currency as cheaply as possible and sell it when it improves in value' or 'sell a currency at a price and buy it back cheaper when its value falls'. The former kind of transaction is called a 'long position' while the latter is called the 'short position'. 

There are many online brokerage companies that operate and provide the platform for trading currencies. Firstly, get in touch with the trading jargon. It takes a bit of time to learn, but once you get used to it, the operation is simple. The main thing is to understand the factors that affect the currency trading prices, which are the markets, central bank policies, and international trade. You could call the whole thing a very advanced form of betting. You make choices based on informed guesses and hope for the best. The choices need to be made through a deep understanding of how a particular currency is going to respond to market dynamics.

You could start out with a practice account, in which you do not actually trade, but get used to the procedure of online trading. Read charts, make calculations, and place virtual buy and sell orders, before you start doing it actually.

Another exercise you could do is follow and read the currency trade news in financial papers. They provide a daily quote and analysis of the exchange rates or you could get the live quotes online. Make your own virtual transactions, based on the data. Make a table of your virtual profits and losses. Once you start beating the markets confidently on a regular basis, make a real investment in the market. 

Brokerage sites provide you with software programs and online tools for analysis and a forex account. You can start trading from the comfort of your home. Alternatively, you could enroll for training, which will give you the depth of knowledge and grasp of fundamental principles. 

What you essentially do is trade between pairs of currencies which are listed in the order of their market value. Online trading is mostly 'direct exchange' of currencies, which holds USD 1.4 trillion of market share.

Read more at Buzzle: http://www.buzzle.com/articles/learn-forex-trading-online.html

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