Many new traders just want to jump into forex without knowing all the fine details. This is what usually causes problems. I am just going to go over forex for beginners, so you have some idea of what to expect. So what exactly is forex? If you are used to stock exchanges like the NYSE, forex may seem strange, because in forex, there is no physical exchange, where people go to work and buy and sell shares. Instead forex is all done electronically on computers. What are the most common currency pairs in forex? By far, the most traded currency pair would have to be EUR/USD, followed closely by the GBP/USD, USD/JPY, USD/CAD, AUD/USD, USD/CHF. What kind of accounts can I have forex? The two most common kinds of accounts you can have in forex are standard accounts and micro accounts. With standard accounts you can trade in standard lots, which would mean that roughly every pip move is worth $10, so if you bought the EUR/USD at 1.4780 and sold at 1.4860, you made 80 pips or standard lot or $800 per standard lot. A mini account is which a standard lot is worth $1 pip. So that same trade would have netted $80 per lot on a mini account. This is really perfect for beginners. Can I short sell on forex? Of course! This is not like stocks. There aren't restrictions for short selling. If there was a lot of people would really be struggling in the forex market. Because of this, the forex market is a lot more flexible than the stock market. Are there commissions? No, at least not in the sense that you are probably used to. With stock trades, you have to pay your broker a fee for whenever you open and close a trade. It gets taken out of your account on the cash side. With forex brokers, they make their money on the bid and ask spread. So for instance if you buy on the EUR/USD at 1.4790 when the bid was 1.4790 and the ask was 1.4787, the spread of 3 pips goes straight to your broker. The great thing is that its built into your trade. It's not like you have to pay those commissions out of the cash in your account.
If you want to learn a little more about forex, make sure to look at all the forex reviews
to see which is right for you. IA highly recommended book for those that are starting out in forex would be
Bird Watching in
Lion Country.
Download the Break The Barrier Guide To Forex
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