What Is Forex Trading?

[BrynnFraley]

I want to get started with forex trading, but I do not know how to get started. I would greatly appreciate any input on this topic.

[Tilly2]

I have no idea what this is all about, now. It's probably just as well.

[ToraToraTora]

foriegn exchange, not a place for a beginner.

[Old_Geezer]

Easy enough Tilly. You took all your life savings out a few weeks ago and converted them into Euros (or some other stable foreign currency) in anticipation of investors, scared of the unknown, withdrawing their investments here for a while. Then when we have voted to leave the EU you try to note the low sterling point before all the risk adverse investors realise their error and start buying in again. Convert back to sterling just prior to that to find you have loads more cash than you did before.

[Orderlimit]

I think Brynn is referring to trading as in the short term buying and selling of whatever currency against another currency, eg US dollar against the Australian dollar, using a 'margin account' via one of the many online brokers. Margin accounts basically allow their clients to borrow many times the amount of their initial investment to try and maximise returns but obviously amplifies their risk.

These high risk retail accounts typically allow initial investment as low as £100, and with a margin leverage account you could probably trade a £10000 position !.

Brynn, as mentioned by Buenchico, if you really want to give it a go you would be best advised to practice with a demo or virtual account which are exactly the same as a live account but funded with pretend money of say £5000.

Probably the most common trading platform used by retail traders who use charts to make trading decisions is Metaquotes MT4 software, available free of charge from most UK brokers. I am not comfortable recommending brokers but looking at the list provided in Buenchico post I would go for the FXPro demo account (FXPro offers negative balance protection and their charts one of the few that are set correctly to show a new trading day as per the US New York closing time - long story)

http://www.fxpro.co.uk/trading/platforms/mt4/desktop Open demo account is near bottom left of page.

Obviously it will take you while to get your head around the software but if you get up and running the best currency pair to trade is the USD/CAD (us dollar against the Canadian dollar) or safer would be the CAD/JPY (Canadian dollar v Japanese Yen) .

Never trade real money until you can consistently make profit for at least six months.

[Orderlimit]

***Never trade real money until you can consistently make profit for at least six months using a simple method that you personally understand and you know has a higher probability of winning than not.

[bobbyatherton]

Forex trading as it relates to retail traders is the speculation on the price of one currency against another. For example, if you think the euro is going to rise against the U.S. dollar, you can buy the EURUSD currency pair low and then sell it at a higher price to make a profit. Of course, if you buy the euro against the dollar, and the U.S. dollar strengthens, you will then be in a losing position. So, it’s important to be aware of the risk involved in trading Forex, and not only the reward.