What Is Forex Trading To A Layman

2007-03-08 10:33:40

( Financial )



If you find yourself asking what is forex trading, think of it as the buying and selling of one forex currency for another at a certain rate called the exchange rate. You experience forex trading on the street, when you exchange dollars for pounds, for example. Others experience it in the complex interbank market.

Forex currency trades in two forms – cash trading over the counter, and currency futures and options trading in a currency exchange. The forex broker trades in both markets; you probably are familiar only with cash trading.

What is forex trading to a layman with gambling instincts will be different from what forex currency trading suggests to a layman with speculative instincts. Gambling depends on pure chance and blind luck. Speculation is entering risky transactions on the chance of getting big profits. Gambling moves on a prayer. Speculation involves strategizing, researching and detailed planning.

For a layman to succeed in forex trading, you must become a competent speculator. The Internet has made forex trading easy for you. Through online forex trading courses, you gain access to forex trading tools that you can use to sharpen your forex trading skills. There are forex made easy learning modules that can be studied.

You can look for a forex broker website that offers free online quotes and charts. Try those sites that have demonstration accounts where you can practice forex trading using real-time forex currency quotes.

If you are a prepared layman, you will find forex trading rewarding and exciting. If you are unprepared, you can get caught in an unstoppable losing cycle.

But having tried to answer for yourself what is forex trading, you should learn to approach it like a business. Hone your skills, have a plan, and exercise business discipline – these are what forex trading should make you do.


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