Learn Forex Trading (DOC) by psychologymania


									                                           Learn Forex Trading

        Forex is the short form for “foreign exchange” and is an exciting business that is increasing in
popularity. In foreign exchange, one currency of a country is traded for another. The foreign exchange
market is one of the largest markets because foreign exchange transactions take place between large
banks, central banks, governments, multinational corporations etc.

        On an average, transactions of the volume of US $ 2 trillion take place globally every day. In
addition to that the transaction volume in the derivatives market is 1.26 trillion, daily. That shows the size
of the market and the potential it has for the players involved. Though retail traders who participate
through brokers and banks form a small fraction of the total participants the Forex market holds a high
potential return for the participants.

Should You Learn Trading?

Learning Forex trading is not that difficult in that there are many systematic courses conducted by many
institutes/universities all over the world. When an entrepreneur commits to learn trading, she will be
mainly exposed to two types of analysis. One is technical analysis and another is fundamental analysis.

Technical Analysis

Technical analysis is the market-generated data used for forecasting price movements. Tools like price
charts and graphs are being used to illustrate the concept. The forecasting is based on three postulates
viz., the market data contains all the fundamentals, volatility of the market and market sentiments. The
possible market trends are up, down and sideways. More often than not the market moves in predictable
patterns. The ultimate aim of technical analysis is to unravel this pattern basing upon the past trends.

Fundamental Analysis

Fundamental analysis assumes a country to be like company with economic reports that reveal the
financial health of that county’s currency. The value of a country’s currency depends upon the products
and services it supplies to the international market. The more it supplies and is able to sell them the more
of a demand is created for the currency because of its need by the purchasers of the product and
services. Fundamental analysis takes into account the country’s potential to generate international trade.
Fundamental analysis is found to be more effective when the learner uses the same judiciously. Learning
the trade in these broad categories help the traders perform well in the market.

        Forex trade holds high prospects for profit as well as the potential for loss depending upon the
trader’s skill and understanding of the market. Learning Forex trade provides that knowledge which
should be analytically used for achieving better performance. The trader who has a more thorough
understanding of the market has a distinct advantage and greater likelihood of creating consistent profits.
As with any business, education and training are the first step toward long term success.

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