To understand forex trading it is important to appreciate currencies are valued relative to one another, if one gets stronger the other must get weaker. Stock markets around the world can rise and fall and, as a result, there is always money to be made in forex trading. The foreign exchange (forex) market is the largest in the world and, unlike the stock exchange, it is a 24-hour market so you can trade at any time.
As mentioned, currencies are relative to each other so they are always traded in pairs – such as USD/GBP. The first currency is the ‘counter’ currency and second is the ‘base’ currency. The way to make a profit in forex trading is buying and selling currencies when the value increases or decreases. It is crucial to realise that by trading on a margin, you expose yourself to losing more that you initial deposit or investment. Before you get started, most online forex brokers such as Juno markets opinions allow you to open a demo account with virtual funds for a couple of weeks. This is a good way to understand the foreign exchange market and trading platform without incurring losses or making silly mistakes.
If you want to start forex trading your first step will be to look for the best online forex trading provider. There are several factors to consider before you apply for a forex account, be sure to read the strengths and weaknesses of all the companies to ensure that you invest your money in the way that you want.