Learn forex trading - Part 1 -Basic forex

To learn forex trading and become a profitable forex trader, you need to master just a few trading tools. I believe that learning forex trading by mastering a few trading tools is all that's necessary to become a highly successful trader. The best forex traders are simple. They learn forex trading by finding tow or three techniques that work consistently. Once they have this forex trading tactics under their belt, they simply implement them over and over again. Repetition in forex trading has value keep this is mind.

What is forex? Why do you want to learn forex trading?

Forex stands for foreign exchange; also known as "fx". Foreign Exchange market is the largest financial market in the world, with a daily volume of over $4 trillion. This is far bigger than the New York Stock Exchange, Nasdaq and futures combined. In a forex trading, you buy one currency while simultaneously selling another.

When you start trading, you will noticed that currencies trade in pairs, like the Euro-US Dollar (EUR/USD) or Pound / US Dollar (GBP/USD). In forex trading there is no centralized exchange . The Forex market is considered an Over-the-Counter (OTC) or 'Interbank' market. All transactions happen via phone or electronic network of banks 24 hours a day starting Sunday A 5 PM ET to Friday 5 PM ET, forex trading begins in Sydney, and moves around the globe as the business day begins, first to Tokyo, London, and New York.

To start trading in forex, all you need is a computer and a high-speed Internet connection and the tools we discuss and share with you on this blog. The cost to trade is now minimal. My broker, offers a micro account you can open starting with $25. This is good because you can use it to test all your skills as you learn forex trading from this site. You can go for a mini account with a minimal start up amount of $300 or a standard account with a minimum of $2000 startup. There are many different brokers out there on the. While you can open these accounts with the minimum required, we advice you to start a micro-account with at least $1000 or a mini account with at least $10,000. That will give you room for testing your tactics as you learn forex trading.

In this first part of learn forex trading, you have learnt a general idea of what forex is. So now that you have chosen to learn forex trading, why do you want to do it? You want to learn forex trading for one reason and one reason only, you want to make money trading. So the question now is how do you make money trading forex?

Here is how you make money trading forex

Trading forex with margin has enabled the little guys like you and me to participate in this huge financial market. Margin trading is a term used for trading with borrowed capital. I will use the example from my broker. Let's say I open a mini account for $300 my require require a margin of $50 to trade with borrowed capital of $10,000. So with $50 I am able to trade as if I got $10,000. So with small amount of capital you can conduct a relatively large transaction quickly and cheaply.

So if I place a trade using just $50 of my initial deposit, this will be known in margin trading as 1lot. If I trade with $100,it will be 2 lots. If I trade with $150 it will be 3 lots. You get the picture.For now, just think of the term "lot" as the minimum amount of currency you have to buy.

Here is an example of what you can make trading forex

Your chart setup is indicating that the British Pound will go up against the US Dollar. You open 1 lot ($10,000) for buying the Pound with a 1% margin at the price of 1.5000 and wait for the exchange rate to climb. This means you now control $10,000 worth of British Pound with $50. Your predictions come true and you decide to sell.
You close the position at 1.5070. You earn 70 pips or about $70. (A pip is the smallest price movement available in a currency). So for an initial capital investment of $50, you have made 120% return. Return equals your $70 profit divided by your $50 you risked to trade.


Learn forex trading, and you could be one of the 10% who trade for a living. If you don't invest time enough to learn forex trading, you will loose your hard earned cash. So take the time to learn forex trading and you will become a master trader.

Open a demo account and trade this account for at least 3 months, before opening a live account.