Forex Trading, Beginner Forex Trader Introduction to Forex Trading


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Forex Trading, Beginner Forex Trader Introduction to Forex Trading

Forex - FOReign EXchange and foreign exchange market

Completely do not understand about foreign currency trading? Totally new beginner to Forex trading? Please start from here.


Foreign Exchange

The foreign exchange or Forex, is the foreign currency or expresses by the foreign currency can use in the international settlement payment means.


Exchange rate and Forex quotes

Exchange rate, also calls the Forex quotes, refers to a country currency by another country currency expression price, or the price ratio between both countries currency.

In the foreign exchange market, the exchange rate is demonstrated by five digits, for example:

Euro EUR 1.2200
Japanese Yen JPY 110.95
Pound GBP 1.7937
Swiss Franc CHF 1.5003

The exchange rate smallest change unit is called pip, which is the last digit figure change, for example:

Euro EUR 0.0001
Japanese Yen JPY 0.01
Pound GBP 0.0001
Swiss Franc CHF 0.0001

According to the international convention, three English letter is commonly used to express the currency name, after the above currency name is the currency English code.

The exchange rate marked price way divides into two kinds: Direct costing law and indirect quotation law.


Foreign Exchange Market

At present, there are numbers of financial product available in the market, but we generally summarize and divide them into: Stock market, interest market (including bond, commercial bill and so on), gold market (including gold, platinum, silver), futures market (including grain, oil and so on), foreign exchange market and so on.

The foreign exchange market is referred to transaction place for buying and selling foreign currency.

The foreign exchange market took an international capital congenial market the history must the stock, the gold, the stock, the interest market be much shorter than, however, it actually by astonishing speed rapid development. Today, the foreign exchange market daily volume of trade has amounted to 150 billion US dollars.


Online foreign currency trading development

Since 1997, along with the Internet development, the online foreign exchange earnest money transaction already has been all the rage the world, becomes the foreign currency trading the popular way, not only between the bank the transaction started to select the online method, individual more and more are also many through the Internet participation exchange market.

The online foreign currency trading development, has broken the region limitation, causes to have to rely on individual originally which the local brokerage firm can participate in the foreign currency trading and the small organization investor, may more convenient carry on the foreign exchange investment.

In December, 2000, US passed "Stock Modernization Bill", this bill request all foreign exchange trader must (NFA) (CFTC) register in the American stock association with the US commodity future transaction committee for the stock commission business (FCM), and accepts the above organization daily supervising and managing, will not conform to the qualifications in the deadline or the foreign exchange entrepreneur which will approve has not been ordered the business closed. This bill appearing, caused the on-line foreign exchange earnest money transaction to step onto the standard development track.


I hope you find this article useful especially if you are beginner into Forex trading, contact me shall you have any comment or suggestion.

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