forex trading

What is FOREX?

The Foreign Exchange market, also referred to as the "FOREX" or "Forex" or "Retail

forex" or “FX” or "Spot FX" or just "Spot" is the largest financial market in the world,

with a volume of about $2 trillion a day. If you compare that to the $25 billion a day

volume that the New York Stock Exchange trades, you can easily see how enormous the

Foreign Exchange really is. It actually equates to more than three times the total amount

of the stocks and futures markets combined! Forex rocks!

What is traded on the Foreign Exchange?

The simple answer is money. Forex trading is the simultaneous buying of one currency

and the selling of another. Currencies are traded through a broker or dealer, and are

traded in pairs; for example the Euro dollar and the US dollar (EUR/USD) or the British

pound and the Japanese Yen (GBP/JPY).

Because you're not buying anything physical, this kind of trading can be confusing. Think

of buying a currency as buying a share in a particular country. When you buy, say,

Japanese Yen, you are in effect buying a share in the Japanese economy, as the price of

the currency is a direct reflection of what the market thinks about the current and future

health of the Japanese economy.

In general, the exchange rate of a currency versus other currencies is a reflection of

the condition of that country's economy, compared to the other countries'

economies.

Unlike other financial markets like the New York Stock Exchange, the Forex spot market

has neither a physical location nor a central exchange. The Forex market is considered an

Over-the-Counter (OTC) or 'Interbank' market, due to the fact that the entire market is

run electronically, within a network of banks, continuously over a 24-hour period.

Until the late 1990’s, only the “big guys” could play this game. The initial requirement

was that you could trade only if you had about ten to fifty million bucks to start with!

Forex was originally intended to be used by bankers and large institutions - and not by us

“little guys”. However, because of the rise of the Internet, online Forex trading firms are

now able to offer trading accounts to 'retail' traders like us.

Secret Recipe for the Ultimate Business

Here are the SECRET ingredients needed to create the ultimate business:

1. You

2. Computer

3. Internet connection

4. Desk (or sofa)

That’s it! No employees. No advertising. No cold calling. No inventory.

Imagine a business with just you, your computer, and a high-speed Internet connection?!

That’s all you need trade in the foreign exchange market!! In other words...

A properly trained Forex trader can potentially earn BIG PROFITS in every single

month, week, or day! (Of course a poorly trained Forex trader can suffer BIG LOSSES

as well.)

· No middlemen. Spot currency trading eliminates the middlemen, and allows you

to trade directly with the market responsible for the pricing on a particular

currency pair.

· No fixed lot size.

In the futures markets, lot or contract sizes are determined by the exchanges. A

standard-size contract for silver futures is 5000 ounces. In spot Forex, you

determine your own lot size. This allows traders to participate with accounts as

small as $250 (although we explain later why a $250 account is a bad idea).

· Low transaction costs.

The retail transaction cost (the bid/ask spread) is typically less than 0.1 percent

under normal market conditions. At larger dealers, the spread could be as low as

.07 percent. Of course this depends on your leverage and all will be explained

later.

· A 24-hour market.

There is no waiting for the opening bell - from Sunday evening to Friday

afternoon EST, the Forex market never sleeps. This is awesome for those who

want to trade on a part-time basis, because you can choose when you want to

trade--morning, noon or night.

· No one can corner the market.

The foreign exchange market is so huge and has so many participants that no

single entity (not even a central bank) can control the market price for an

extended period of time.

· Leverage.

In Forex trading, a small margin deposit can control a much larger total contract

value. Leverage gives the trader the ability to make nice profits, and at the same

time keep risk capital to a minimum. For example, Forex brokers offer 200 to 1

leverage, which means that a $50 dollar margin deposit would enable a trader to

buy or sell $10,000 worth of currencies. Similarly, with $500 dollars, one could

trade with $100,000 dollars and so on. But leverage is a double-edged sword.

Without proper risk management, this high degree of leverage can lead to large

losses as well as gains.

· High Liquidity.

Because the Forex Market is so enormous, it is also extremely liquid. This means

that under normal market conditions, with a click of a mouse you can

instantaneously buy and sell at will. You are never "stuck" in a trade. You can

even set your online trading platform to automatically close your position at your

desired profit level (a limit order), and/or close a trade if a trade is going against

you (a stop loss order).

· Free “Demo” Accounts, News, Charts, and Analysis. Most online Forex

brokers offer 'demo' accounts to practice trading, along with breaking Forex news

and charting services. All free! These are very valuable resources for “poor” and

SMART traders who would like to hone their trading skills with 'play' money

before opening a live trading account and risking real money.

· “Mini” and “Micro” Trading:

You would think that getting started as a currency trader would cost a ton of

money. The fact is, compared to trading stocks, options or futures, it doesn't.

To start visit:http://www.goforex.net/ or  Cisco computer : 94 Arthur Eze avenue Awka Anambra state  Nigeria for one on one tutorial. Tel: 08033922945