FOREX TRADING

WHAT IS FOREX TRADING: FOREX is an acronym for foreign exchange. It is Simply the trading of currencies against the other,currencies of different countries. For example, in Europe the currency in circulation is called the Euro ( EUR) and in the United States the currency in circulation is called the US Dollar ( USD). An example of a forex trade is to buy the Euro while simultaneously selling US Dollar. This is called going? You trade Forex through a broker or market maker. A trader you chooses a currency pair expected to appreciate in value over a period of time then place a trade on the choosen currency. Lets say you purchased 2,000 Euros in the month of may 2011,at $2,400 USD. Then in the month of july Euro’s value vs. the U.S. Dollar’s value increased thato 2,000 Euros is now worth $2,600 U.S. Dollars. If you had chosen to end your trade at that point, you would have made $200 gain. It take little amount of money to place an order.The broker then passes the order along to a partner in the Interbank Market to fill your position. When you close your trade, the broker closes the position on the Interbank Market and credits your account with the loss or gain. This can all happen within few seconds.