Forex Trader Training - The Basics

What is forex trading?  Here are some Forex Trader Training Basics.  Forex trading is investing for profit using foreign currency movements. Unlike stocks which concentrate on one stock going up or down. Forex Trading looks at how foreign currencies relate to each other. That is why the trading is done in currency pairs. For example to explain how forex trading works. Lets say that you are the investor and the exchange rate of EUR/USD is 1.0960. If you buy 1000 euros the total invested is 1096.00 U.S dollars. Let's say a week later the exchange rate is 1.2092. The value of the euro increased with regard to U.S dollar. If you sell the 1000 Euros, you will have 1209.20. You have profited 113.20 U.S dollars.

As far as Forex trading is concerned, You should understand that you must trade only when you anticipate that the currency you are going to buy will increase in value relative to the currency you are going to sell. This is how you make money using forex trading.

Ultimate Forex Trader Training System 

Althought most of the following is theory.  I consider it boring but it must be part of your knowledge base and is required here for the beginner as Forex Trader Training Basics.  The experienced should know the following basics.

Why Trade Foreign Currencies?

There are many benefits and advantages to trading Forex. Here are just a few reasons why others are trading in this market:

• No commissions.
  No clearing fees, no exchange fees, no government fees, no brokerage fees. Brokers are make their money for their services through something called the bid-ask spread.
• No middlemen. Currency trading eliminates the middlemen, you trade directly with the market responsible for the pricing on the particular currency pair.
• No fixed lot size.
  In the futures markets, lot or contract sizes are determined by the exchanges. A standard-size contract for silver futures is 5000 ounces. In Forex, you determine your own lot size. This allows traders to participate with small accounts, if wanted.
• Low transaction costs.
  The retail transaction cost (the bid/ask spread) is typically less than 0.1 percent under normal market conditions. At larger dealers, the spread could be as low as .07 percent.
• A 24-hour market.
  There is no waiting for the opening bell - from Sunday evening to Friday afternoon EST, the Forex market is open, it doesn't sleep. This is great for those who want to trade on a part-time basis, because you can choose whenever you want to trade--morning, noon or night.
• No one can corner the market.
  The foreign exchange market is so big and has so many people engaged that no single entity (not even a central bank) can control the market price for an any period of time.
• Leverage.
  In Forex trading, a small margin deposit can control a much larger total contract value. Leverage gives the trader the ability to make nice profits, and at the same time keep money at risk to a minimum. For example, Forex brokers offer 200 to 1 leverage, which means that a $100 dollar margin deposit would enable a trader to buy or sell $20,000 worth of currencies. Similarly, with $1000 dollars, one could trade with $200,000 dollars and so on. But leverage can be dangerous also. Without proper management, risk is greater, this high degree of leverage can lead to large losses as well as gains.
• High Liquidity.
  Because the Forex Market is so huge and enormous, it is also extremely liquid. This means that under normal market conditions, with a click of a mouse you can instantaneously buy and sell at any time. You are never "stuck" in a trade. You can even set your online trading platform to automatically close your position at your desired profit level. This is called a limit order, You can close a trade if a trade is going against you. This is called a stop loss order.
• Free “Demo” Accounts, News, Charts, and Analysis. Most online Forex brokers offer 'demo' accounts to practice trading. These are "free services" along with breaking Forex news and charting services. These are very valuable resources for traders who would like to enhance their trading skills. You can use 'play' money before opening a live trading account and risking real money.
• “Mini” and “Micro” Trading:
  Online Forex brokers offer "mini" and “micro” trading accounts, some with a minimum account deposit of $300 or less. This makes Forex Trading much more accessible to the average individual who doesn't have a lot of start-up capital.

There are many websites which will explain to you how Forex trading works, but few if any will go into specific detail on what to do to make consistent profits. There are also many websites, as well as brokers who will take advantage of a beginner Forex Trader.

The hucksters play on the emotion of greed and fear. If you are new to forex trading. You are anxious and also fearful at the same time. If you are looking for a quick fix or easy road, there is none. The many pages located here on this website will preach patience and discipline. You must develop your own trading style. Treat Forex trading as a real business.