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           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
• 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
• 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

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