The foreign exchange market is the largest financial market in the world by volume.

Across the world, the daily volume of stock exchanges is till just one third of the volume of the foreign exchange market.

The foreign exchange market is a market for money. Currency pairs, such as EUR/USD and USD/JPY are the value of one currency against another, the exchange rate of the currencies.

There is no central processing market, the market being made up of interbanks, which operate the foreign exchange market by processing orders to trade one currency for another.

It does not exist as a market itself, that’s why it is called an over-the-counter marketplace.

The market is opened 24 hours/day, 7 days/week. If the European session is ended the Asian session or US session will start, so all world currencies can be continually in trade.

When is the best time to trade? The best time to trade is when most traders are trading, when more than one major market is open.

Some currencies are traded more often during certain periods of the day.

During the London trading session, the US Dollar, the Great British Pound and the Euro are the most actively traded currencies. During the Tokyo session, the Japanese Yen grows in volume.

Exchange rate fluctuations are usually caused by actual monetary flows as well as anticipations on global macroeconomic conditions.

Currency traders try to take advantage of even small fluctuations in exchange rates.

Now that you know how the market works here is how you can make money out of it. Making money on the Forex market is as easy as knowing in which direction a currency pair is likely to travel.

The difficulty is not making money, but knowing how to make it.

Forex Basics:

  • Buy or sell (Long/Short)
  • Bid/Ask Spread
  • Power/Weakness of economy
  • How much money you have
  • Pips

It is very important that you think carefully about the trading strategy that you are going to adopt, because this will be your key to success.

Remember that there is no single strategy in currency trading and every Forex trader has to develop his own strategy.

Important Orders:

  • Stop Loss
  • Take Profit

If you want to take control of your own finances make money working only few hours a day, start learning an practicing currency trading.

For more information, please go to these basic resources:

Currency Charting
Forex Market
Education Forex Trading

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Filed under: Forex Currency Trading Beginner

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