| Currency Trading Tutorial: The Basics Of Currency Trading |
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| Written by Angie Walters |
| Friday, 02 April 2010 17:54 |
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You no doubt know someone who is making a full-time living from currency trading. When these traders talk about what they do, they often make it sound terribly complicated. What follows is a brief currency trading tutorial to make you familiar with the basics.
You no doubt know someone who is making a full-time living from currency trading. When these traders talk about what they do, they often make it sound terribly complicated. What follows is a brief currency trading tutorial to make you familiar with the basics. What exactly does the term 'currency trading' mean? It's all rather simple. A stock trader is someone who buys and sells stocks. A currency trader is someone who buys and sells currencies for a living. What are the benefits of currency trading? The currency markets are highly liquid. You can buy any currency you wish at any time of day and when you want to sell again, there will always be a willing buyer. Many traders often double their trading account in the course of one day. There are risks involved though, and you can also lose all your money very quickly if you don't know what you're doing. Where and how can someone become a currency trader? There are numerous websites where you can sign up for a free forex trading account. You will be able to start trading without investing any money by using a demo account. Does a demo account and a real account work in the same way? With most online traders the answer to that is yes. A demo account and a real account only differ in the fact that with a demo you can't actually lost anything since you are trading with simulated money. How can a trader know when to buy a currency and when to sell? If you knew the answer to this on every occasion, you would soon be a millionaire. The general rule sounds simple: Buy low, sell high. The trick is in knowing when the market has reached bottom. To help you, you can download many free analysis packages from the Internet which use technical indicators to advise you when to buy or sell a particular currency. What on earth is a technical indicator? A technical indicator is a statistical formula. An example of one is the often used moving average. Many traders use this to guide their buying decisions. As soon as the price of a currency moves above its moving average, they would buy. Does one have to be a statistician to use technical indicators? Not really. In fact you need to know fairly little about statistics, since the software packages referred to above will display all these technical indicators in graphical format. So you can see at a glance whether you should be buying or selling. Where can one get free live currency prices? Some currency trading websites offer free live prices to their clients. Others charge for live prices and give delayed prices for free. The delayed prices will for example only update every fifteen minutes, every hour or even every day. This concise currency trading tutorial only covers the fundamentals of forex trading. Your next step should be to sign up for a free demo trading account and start practising with the various technical indicators. Don't even think of trading with real money before you understand the basics of the currency markets. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Discover more about currency trading with these currency trading tutorials. |