The term “FOREX” stands for “foreign exchange”which simply means trading in foreign currencies.

Foreign currency trading takes place at the international foreign exchanges in, for example, London, New York, Frankfurt, Sydney and Tokyo. At an average daily turnover rate of US$ 5 trillion, the foreign exchange market is the largest liquid financial market in the world. Foreign exchange trading is possible 24 hours 5 days a week.This page provides you with some essential information to help you understand the basics of Forex trading, including:
What is Forex trading?
What are the benefits of Forex trading?
Who should trade Forex?
What tools do you need to trade Forex?

What is Forex trading?

Basically, when you place a Forex trade you’re believing a currency is going to move in one direction either up or down, relative to another currency.
For example, you might think the Euro (EUR) is going to increase in value against the American dollar (USD) so you could place a trade to buy the EUR/USD currency pair. If the Euro rises you would make a profit; if it drops you would incur a loss. Inversely, if you thought the Euro was going to decrease in value you could place a trade that would benefit from that price movement.
Before launching with a live account, traders should spend time familiarizing themselves with the way the Forex market works and establishing a realistic trading strategy based on their individual goals.

What are the benefits of Forex Trading?

There are plenty of reasons why people choose to trade Forex, from wanting to earn some extra income to evaluate their assets in the world’s largest financial market of Forex. Here are three of the main reasons our clients enjoy Forex trading:

  • Forex allows you to start small
  • Markets open 24 hours a day
  • World’s largest and most liquid financial market
  • Markets are low cost
  • Markets are transparency
  • Cycles and trends in the market are easier to predict than the share market

Who should trade Forex?

It doesn’t matter if you’ve never traded before, only a little or have a lot of time to trade – Forex trading offers opportunity for everyone. Forex trading is particularly popular for the following:

  • New traders getting started in the markets with low investment amounts
  • Day traders placing several trades a day
  • Swing traders holding trades for a few days
  • Carry traders holding positions for weeks or months
  • Full time workers trading in the evening looking for ways to supplement their income
  • Traders who like the convenience of mobile trading

What tools do you need for Forex Trading?

As an introduction, a new trader could consider starting with the following basics:

  • An online Forex trading platform with charting options, such as MT4
  • A demo account that lets you practice trading with virtual money, at no risk
  • Tutorials like How to use your platform
  • Some basic Forex education
  • As you advance your trading, the following tools may be of use:

    • More in-depth education
    • Technical analysis from expert traders
    • Automated trade journals

Start your trading journey today