I first became interested in Forex trading in 2016. Some Forex article popped up on my desktop while I was busy browsing a job site and I opened it.
Though I’d have preferred to continue with my job hunt, I could’t resist the temptation of looking into the content of that luscious title.
I like to refer to it as the cyber accident that completely changed my life.
I read this piece to the end.
And with each word I savored, I asked questions.
Questions which would later drive me to reading more about Forex trading.
It should interest you that this was the beginning of the end of my job search. (ps. this is neither a suggestion for you to quit your job nor is it a recommendation to stop following your dream).
Over the years I have learnt a lot form different brokers and I still keep learning.
In the next couple of weeks I will pass on to you all that I have learnt about Forex Trading.
I will breakdown everything to 11 short courses covering: – what Forex is, how to trade, when to Trade, who can Trade, why trade Forex and margin trading in the first course. The rest of the topics will be covered on subsequent Forex courses.
Course 1 – Lesson 1 – What is Forex?
Foreign Exchange, Forex or FX is a global market for buying & selling currencies. Traders make these exchanges with the aim of making profits off currency price changes.
A great analogy of how the market works is given by XM Forex in this context.
You don’t necessarily need to be a trader to participate in the foreign exchange market. Every time you travel and need to exchange some money into a foreign currency, you are participating in it.
Imagine that you have just arrived in New York from Paris. You want to buy a hamburger at the airport, but you only have euros on you. So you’ll need some US dollars if you don’t want to see New York on an empty stomach.
In that case, what do you do?
You go to the first foreign exchange desk at the airport, and exchange your euros into US dollars. Whether you believe it or not, this is the very first step of what we call Forex Trading.
Wait a minute! You exchanged 10 euros and got back 12. 74 US dollars. How’s that possible? This is the actual exchange rate that made you richer.
After a few days you wave goodbye to the Statue of Liberty and take a flight to Berlin. You exchange your leftover US dollars into euros.
Hey, what happened?
You got back less than you expected… Why?
While you were in New York City, the exchange rate changed.
That’s because of inflation, economic changes, and the balance between supply and demand, to only name a few of the factors that can influence the value of a currency