FOREX TRADING FOR BEGINNERS – Where to Start?
As good a place as any for a FOREX beginner is to start with is gaining a good understanding of the lay of the Currency Trading land. As tempting as it is to jump into this massive money trading market, your wallet – and you – will be happier by tempering your enthusiasm and easing your way into this massive trading arena.
Not to say you won’t set the Currency Trading world on fire and impress your friends and family with your first million made overnight…but….let’s concentrate on learning a little first…then on making your first few PIPs.
Three areas that are valuable and helpful to learn about when starting out in FOREX trading are:
– FOREX History
– Major Foreign Exchange Market Participants
– Currency Pairs and Currency Codes
Learning about FOREX History and how it has shaped the trading industry we know and trade in today provides a good historical baseline and perspective.
There are several events that occurred of note in FOREX history, starting with the early Gold Standard days.
The conclusion of WWII brought the then-new Bretton Woods Agreement and System to the forefront, where it remained until the early part of the 1970’s, when the gold standard finally ended.
That end ushered in floating foreign exchange rates which were adopted by the global financial currency trading community, and which form the base of today’s foreign exchange trading markets and their respective exchange rates.
THE MAJOR FOREX PLAYERS
As a member of the FOREX trading for beginners “club” it’s also a good idea to learn more about the major players in FOREX… called foreign exchange market participants, of which you are now, or will likely become one soon, once you start trading the FOREX.
The major players include our, and other Foreign Country Governments and the Central Banks, the Interbank market, companies that use the Foreign Exchange markets for commercial/financial hedging purposes, and speculators – which include both large hedge funds, and the individual FOREX speculator like you.
CURRENCY PAIR and CURRENCY CODES
Speaking of trading foreign exchange currencies, how do you know what you are trading with all those weird looking 3-letter FOREX currency code abbreviations you see?
Well, every foreign currency has its own unique code, and because you are in the forex for beginners club, we will introduce you to Forex Currency Pairs and their associated codes.
There are several main currency pairs that are more heavily traded than the rest, and they are called major pairs. These include the U.S. Dollar and the Euro among other main global currencies.