Friday 8 April 2011

How Forex Trading Is Done

Since forex trading is trading of one currency for another, it is always done in pairs. And all the major and commonly traded currencies are paired against US dollars. There are four main currency pairs: British Pound and USD (GBP/USD), Euro and USD (EUR/USD), USD and Japanese Yen (USD/JPY), USD and Swiss Frank (USD/CHF). In each currency pair, the first currency considered as commodity and the second one as money. So if you choose GBP/USD to trade, and if you buy, you buy British Pound against USD and if you sell, you sell British Pound against USD. It doesn’t matter what currency you have in your account. The trading software takes care of the exchanges and transactions automatically.This software is usually provided by the broker. The important point to remember is that there is no comrevensive or full proof guide for forex trading for beginners. Have some basic knowledge and play around with a demo account for a couple of months and then with a mini account. This is the best learning process.No amount of theory can prepare you for forex trading. But yes, you need to be familiar withe terminology and the concept of forex trading if you want to be successful in this venture.
How Long Forex Trading Has Been Around
Currency trading has been going on for a long time to facilitate normal business of different countries with different currencies. But now with the advent of ecommerce, online trading of currency has started. And so a new type of business has evolved. This is what is commonly known as forex trading.

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