Getting Started: Forex Trading for Beginners

The forex market represents an international currency market, where traders make investments for the sole purpose of obtaining profits by using the purchase and sale of foreign currencies. The changes in demand and supply play a major role in the determination of the exchange rates of all currencies that are in circulation on the market.

Demand and supply are mainly influenced by economic, political and nature events as well as other events from the human society. As a result a fluctuation towards the higher and lower meanings of the current prices of foreign currencies is observed.

Traders on the forex market are guided by the basic principle of purchasing at a low price and selling at a higher one. They take advantage of the currency price fluctuations and as a result get profits. The forex market is distinguished from other sectors of the world financial system in the following ways:

• Sensibility to a larger number of factors.
• Provision of access to all individual and corporate traders
• Liquidity of traded currencies caused by the high turnover
• Twenty-four hour access to the market, which enables traders to place positions even after the end of the working day or during holidays

The benefits that the forex market offers to its participants don't come for free. Forex trading involves high levels of risk in return to the potentially high profits. Before you start executing successful trades it is necessary to get acquainted with:

• The structure of the forex market
• The principles that guide the formation of currency prices
• The factors that influence the movements of currency prices
• The sources from which you can get all this information
• The trading instruments and rules that apply to forex trading
• The levels of trading risks
• Analysis and prediction of market movements strategies

It is recommended that before you actually start trading on the forex market to try yourself with the available demo-trading programs. The latter uses virtual money to simulate the conditions and trades that are typical for the forex market. It is very suitable for forex trading beginners who will be able to gain some of the basic experience needed.