Basic Forex Education_1. Why Trade Forex

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.