FOREX Trading for Beginners – Start Learning
So – Foreign currency trading. For beginners, is there a right place to start?
How do you know what to read, where to start out, and what’s a good place to start, so as not become overwhelmed?
A word to the wise for total FOREX newbies or wanna-be FOREX beginner traders – - – use caution. Unlike Formula 1 racing, where the red flag comes out after an accident or road hazard – - – with foreign exchange currency trading, its fine practice to start out slower, and gradually work your way up.
Build a FOREX beginner resource library. Study good books. Gain knowledge of what consistently top FOREX traders do and how they operate when trading. Model them, their trading techniques and their trading psychology.
One of the best places for a FOREX beginner to start is just understanding the lay of the land first. As the old saying goes, slow and steady wins the race. So pull back the throttle on just diving in headfirst into trading.
We’ll talk first about FOREX History, then the Major FOREX Player trading FOREX, and last look at Currency Pairs and Currency Codes.
FOREX History
FOREX history addresses how we got to where we are in today’s modern Currency Trading world, and several of the important evolutionary events that occurred during the previous several decades.
This includes the early Gold Standard days in the 1800’s to the end of WWII. After that came 30 years under the Bretton Woods Agreement and System, where the U.S. Dollar replaced gold a the main reserve vehicle. Then came the end of Bretton Woods under former President Nixon in the early 1970’s, which ushered in the modern day Forex trading universe of Floating Foreign Exchange Rates.
MAJOR FOREX PLAYERS
In Fx, there are a couple of main players who are responsible for a huge amount of the trading volume that occurs every day, and this is imporant to you. Why?
Because the FOREX the largest trading market in the world….dwarfing other trading markets combined. This massive amount of daily trading volume creates a large amount of market liquidity, making it very easy for you enter and exit your trades.
These major players fall into four groups – speculators (people like you, and big hedge funds), Commercial/Industrial hedgers, Governments and their Central Banks, and the Interbank market
CURRENCY PAIRS & CURRENCY CODES
Understanding currency pairs and their related codes is important if you want to trade the FOREX starting out as a FOREX beginner.
FOREX is traded with 2 currency pairs in a trade, traded as a single unit. Each global currency pair has a 3-letter code that identifies it. An example is the Euro whose code is EUR and the U.S Dollar code which is USD. The actual pair looks like this – EUR/USD.
Currencies are also divided into major pairs and minor pairs. The ‘major’s are those FOREX pairs that are most heavily traded on the worldwide FOREX markets. There are about a half dozen of these major pairs, and the EUR/USD is one of them.
Lower volume traded pairs are called ‘minor’ pairs, and most of the other global currencies fall into this group.
There is alot more detail around these three areas we just touched on for a FOREX beginner. Check it out through our link in the below resource box.
