INSURANCE: HERE IS WHAT FOREX TRADING IS ALL ABOUT

           An Introduction to FOREX Trading:

                         Hey traders,

This free Forex mini-course is

designed to teach you the

basics of the Forex market and

Forex trading in a non-boring

way. I know you can find this

information elsewhere on the

web, but let’s face it; most of it is scattered and pretty dry to read. I

will try to make this tutorial as fun as possible so that you can learn

about Forex trading and have a good time doing it.

Upon completion of this course you will have a solid understanding

of the Forex market and Forex trading, and you will then be ready to

progress to learning real-world Forex trading strategies.

What is the Forex market?

• What is Forex? – The basics…

Basically, the Forex market is where banks, businesses,

governments, investors and traders come to exchange and speculate

on currencies. The Forex market is also referred to as the ‘Fx

market’, ‘Currency market’, ‘Foreign exchange currency market’ or

‘Foreign currency market’, and it is the largest and most liquid

market in the world with an average daily turnover of $3.98 trillion.

The Fx market is open 24 hours a day, 5 days a week with the most

important world trading centers being located in London, New York,

Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris, and Sydney.

It should be noted that there is no central marketplace for the Forex

market ; trading is instead said to be conducted ‘over the counter’;

it’s not like stocks where there is a central marketplace with all

orders processed like the NYSE. Forex is a product quoted by all the

major banks, and not all banks will have the exact same price. Now,

the broker platforms take all theses feeds from the different banks

and the quotes we see from our broker are an approximate average

of them. It’s the broker who is effectively transacting the trade and

taking the other side of it…they ‘make the market’ for you. When

you buy a currency pair…your broker is selling it to you, not ‘another

trader’.

• A brief history of the Forex market

Ok, I admit, this part is going to

be a little bit boring, but it’s

important to have some basic

background knowledge of the

history of the Forex market so

that you know a little bit about

why it exists and how it got

here. So here is the history of

the Forex market in a nutshell:

In 1876, something called the gold exchange standard was

implemented. Basically it said that all paper currency had to be

backed by solid gold; the idea here was to stabilize world currencies

by pegging them to the price of gold. It was a good idea in theory,

but in reality it created boom-bust patterns which ultimately led to

the demise of the gold standard.

The gold standard was dropped around the beginning of World War

2 as major European countries did not have enough gold to support

all the currency they were printing to pay for large military projects.

Although the gold standard was ultimately dropped, the precious

metal never lost its spot as the ultimate form of monetary value.

The world then decided to have fixed exchange rates that resulted

in the U.S. dollar being the primary reserve currency and that it

would be the only currency backed by gold, this is known as the

‘Bretton Woods System’ and it happened in 1944 (I know you super

excited to know that). In 1971 the U.S. declared that it would no

longer exchange gold for U.S. dollars that were held in foreign

reserves, this marked the end of the Bretton Woods System.

It was this break down of the Bretton Woods System that ultimately

led to the mostly global acceptance of floating foreign exchange

rates in 1976. This was effectively the “birth” of the current foreign

currency exchange market, although it did not become widely

electronically traded until about the mid 1990s.

(OK! Now let’s move on to some more entertaining topics!)…

What is Forex Trading?

Forex trading as it relates to

retail traders (like you and I) is

the speculation on the price of

one currency against another.

For example, if you think the

euro is going to rise against the

U.S. dollar, you can buy the

EURUSD currency pair low and

then (hopefully) sell it at a higher price to make a profit. Of course,

if you buy the euro against the dollar (EURUSD), and the U.S. dollar

strengthens, you will then be in a losing position. So, it’s important

to be aware of the risk involved in trading Forex, and not only the

reward.

• Why is the Forex market so popular?

Being a Forex trader offers the most amazing potential lifestyle of

any profession in the world. It’s not easy to get there, but if you are

determined and disciplined, you can make it happen. Here’s a quick

list of skills you will need to reach your goals in the Forex market