The object of all individuals involved in online forex trading is to make money by buying one currency when it seems to be under-valued, hoping that its price will rise compared to the currency they sold. What makes Forex a truly unique market is that it operates non-stop during the business days and is the largest financial market in the world with an estimated turnover of $1.5 Trillion a day. The market operates 24/7 Monday through Friday, because as the Asian market closes, the European one opens, then the US one, and so on.
The online forex trading business is all about currencies. If you notice a typical forex chart, you will see that the currencies are grouped in pairs, noted by XXX/YYY (international three letter codes for the currencies). For example, EUR/USD is the price of the euro expressed in US dollars. Over 80% of all currencies are traded against the USD, making the USD the most traded currency, followed by the Euro (EUR), Pound Sterling (GBP), Japanese Yen (JPY), and Swiss Franc (CHF), these currencies are called the majors.
Other forex related reports show that just over 5% of all traders are able to profit consistently. The forex market is a difficult one to master, so if you want to be successful, you must be knowledgeable, have a sound strategy coupled with a tested online forex trading system and the psychology if a winner. Some of the factors which determine the movement of currencies are political situations, news, official government statements, and economic trends.
Perhaps the biggest advantage of forex trading is that there are no borders, which enables individuals from around the world to participate, regardless of their nationality or geographical location. Opening a Forex account has never been easier than now, with great opportunities available online. There are many forex trading websites where you can open an account and begin participating in this exciting market.
Having a forex trading strategy is important for your success. The forex market can be very tricky, so it’s best to start with small trades if you are new to this. There are strategies which rely on mathematical models and analysis of forex charts and graphs for a given currency pair. Other approaches are based on more obvious factors such as political news and situations. The best way is a combination of both methods.
To start trading on the FX market, you need to set up an account with an official broker. There are plenty of brokers available on the Internet, so choosing the best one will require a little research from your end. Different brokers have different terms and conditions for opening an account. Most require a deposit of anywhere from $50 to $2000.
Forex websites require you to register for an account and then fund your account (using a credit card, or bank wire), after doing that, you will be able to access to their online trading platform. Although trading platforms vary with their features, they all have the same basic function.
If you are new to online forex trading, it’s a good idea to start with smaller trades until you get some experience, and NEVER risk more than you can afford to lose.