Forex trading gives you the opportunity to make a good profit, even though when playing on the market you are running a risk.

It is not a market for everyone, and certainly not for people who are risk-averse and very cautious about money.

With almost 90% of all the currency transactions consisting of 7 major currency pairs, helps these currencies display price stability, smooth trends, narrow spreads and high levels of liquidity.

The simultaneous buying of one currency and selling of another one is a currency trade. The currency combination used in the trade is called a “cross”.

Major traded currencies:

  • EUR/USD – Euro/US Dollar
  • USD/JPY – US Dollar/Japanese Yen
  • USD/CHF – US Dollar/Swiss Franc
  • GBP/USD – British Pound/US Dollar

The interest rate differential varies according to the cross you are trading.

On the EUR/CHF, for example, the interest rate differential is quite small, whereas the differential on NOK/JPY is large. This is because if you trade NOK/JPY, you get almost 7% annual interest in Norway and close to 0% in Japan.

If you borrow money in Japan, to finance the trade and buying NOK, you have a positive interest rate differential.

You can have both a positive and a negative differential, so it may work for or against you when you make a trade.

If you trade from rules that don’t work you will experience self-sabotage.

If you don’t take measures to increase your awareness of your own internal thinking, you will execute in the wrong spot relative to actual order flow, turning what initially promises to be a winner into a loser.

Get started and prepare yourself very well before you trade. Open a demo account and start practicing.

For more information, please go to these basic resources:
Education Forex Trading
Online Trading Forex
Free Forex Education