Currency Trading For Dummies- Simple, Effective Tools
Learning how to trade doesn’t have to be a complicated process. Currency trading is increasingly becoming a more popular way of making money for many people. Fortunately there are numerous ways that one can learn the basics of trading.
Currency trading involves trading currencies from different countries against each other. Typically done through a broker, this type of trading is quite a risky form of trading. So it’s important to understand that there’s a high degree of risk involved, before getting started.
Just like any other form of speculation, you want to buy a currency at one price and sell it at a higher price, in order to make a profit.
The most traded currency pairs include:
- EUR/USD: Euro
- GBP/USD: Pound
- USD/CAD: Canadian Dollar
- USD/JPY: Yen
- USD/CHF: Swiss franc
- AUS/USD: Aussie
You’ll want to start by understanding the basics, then moving onto forex trading systems, trading psychology, trade and risk management.
Understanding the basics, means getting a firm understanding of the terminology used in the world of trading.
What is the bid?
The bid is the price your broker is willing to buy at.
What is the ask?
The ask is the price your broker is willing to sell at.
Currencies are quoted in pairs and the exchange rate is used to represent the purchase price between the two currencies.
The reason you are trading is to make a profit. You’ll be hoping that the currency you have to trade will result in you gaining profits, so it’s important to keep up to date with world news, political news and trends in the markets. Keep up to date with economic news, as this will be your portal to currency trading success. Currency trading involves a lot of fluctuations in currency, so you’ll want to be ahead of the pack when it comes to knowing the right moments to trade.
