Lesson 1: Why Trade Forex Also known as the foreign exchange market, Forex is the market where one currency is traded against another. Some of the market participants exchange foreign currency for their own, like multinational corporations, which must pay wages and other expenses in different nations where they sell products. However, a large part of this market is simply currency traders, who make money or movements in exchange rates - just like stock traders speculate the price changes for stocks. So why trade Forex? The Forex Market is by far the biggest and most popular financial market in the world. Traded globally by a large number of individuals and organizations, its average daily trading volume exceeds 5 trillion US dollars. It's a 24-hour market; it is open from Monday morning in Australia until Friday afternoon in the USA - which means you can trade morning, noon, or night. There are no commission fees, no exchange fees, no government fees, and no brokerage fees. Most Forex brokers earn money from spread, which is the difference between a bid rate and an ask rate. No middleman There are no middlemen between the trader and broker. Therefore the trader is at liberty to trade online without having to go through a central exchange, saving time and additional fees. Leverage gives traders the power to control much larger total contract value than their initial deposit. Generally, traders get to trade for as much as 500 times their leverage so if you want to have an exposure of $12,000, you would have to deposit
only $25, which makes it altogether, a great platform Free Practice Most online Forex brokers offer free demo accounts for you to build your skills and practice trading, along with real-time Forex news and charting services. This way, you can get a feel for trading without risking any money. Reasons not to trade Forex Well really, there is no reason not to give it a try! I used to think that you had to be some kind of genius or a nerdy guy with a degree in economics to be a successful trader - but I soon learned this is not the case. I believe everyone can do it. And with a little patience, you will be able to do it too.