What You Need to Know About Forex Trading

What You Need to Know About Forex Trading explained by professional Forex trading experts the “ForexSQ” FX trading team.

What You Need to Know About Forex Trading

Foreign exchange (forex) trading is buying or selling one currency in exchange for another, in an attempt to extract a profit from the price movements. All currency trades involve two currencies, and trades are facilitated by a forex broker. Currency markets are open 24-hours a day during the week, which is an advantage over the stock market which is only open for a portion of each week day.

The forex industry is not heavily regulated and provides high leverage.

This makes it an attractive option for new traders starting out with limited capital (leverage increases the “buying power” of the trader’s capital). That said, there are also risks that forex traders need to be aware of, as well some basic information they should know before starting.

These articles provide an overview of these crucial basics, including what a currency pair is, currency pair symbols, trading hours, position sizing and pip values, how profits are made, leverage, capital requirements for trading, forex brokers and trading fees.

Currency Pairs in Forex Trading

Any forex trade actually involves two currencies. If you are going on a trip to Europe, you take your US dollars and exchange them euros. That’s a currency transaction—exchanging one currency for another. Forex traders do the same thing, except they are attempting to profit from changes in the prices of the currencies.

Currencies are always quoted relative to one another, called a pair. For example, the EUR/USD is the price of US dollars relative to euros.