Forex Trading.Summary Information for Beginners

Forex trading can be a daunting task than stock trading. One thing that you should know is that forex market is actually simpler and straightforward than the stock market. The first thing to do is to open a trading account with a retail broker. There are some paperwork activities that are involved when you are opening an account. You are required to provide some basic information on your financial status. When your application is approved, you can fund your account so that you can begin trading. Another important issue is that you should choose the contract size and leverage that you want to use when trading.
In forex trading, leverage is important as it refers to the ratio that you want to invest in the trade. Some of the popular leverage ratios include; 10:1, 20:1, 50:1, 30:1 and 100:1. Trading with a higher leverage increases your profits as well as losses. It is important to understand the currency pairs. Within forex, each market measures the value of a single currency against another currency. An example of this is in EUR/USD, the value of euro is measured in terms of US dollars. Examples of other markets include USD/JPY, USD/CHF and GBP/USD. Note that the order of currencies is very important. You can either buy or sell any currency pair. All you have to ensure is that you sell the currency at a better price that will generate good profit. For example, you can purchase GBP/USD. In this purchase, you are aiming that the pound will have higher value than the dollar.

by:Timothy stevens