Introduction to Forex Online Trading (Foreign Exchange)

What is Forex online trading?

Forex is short for foreign exchange and is the name given to the "direct access" trading of foreign currencies. With an average daily volume of $1.4 trillion dollars, forex is roughly 30 times larger than all of the futures markets combined, and is therefore one of the most liquid markets in the world. Because forex is electronically traded like Nasdaq stocks, trading occurs 24 hours a day around the world.

How does Forex online trading work?

In forex online trading, currencies are always priced and traded in pairs. You simultaneously buy one currency and sell another or vice versa. The most valuable currency is listed first. For instance, you believe that the US Dollar will strengthen vs. the Euro Currency so you would sell the Euro Currency and buy the US Dollar or Sell EUR/USD. If you believed that the Euro will strengthen vs. the US Dollar then you would Buy EUR/USD. The British Pound (GBP) and the Australian Dollar (AUD) and the Euro Currency (EUR) are more valuable than the US Dollar (USD) and therefore are listed first. The Japanese Yen (JPY), the Swiss Franc (CHF) and the Canadian Dollar (CAD) are less valuable and therefore listed second.

What are the most active currency pairs?

Around 85% of all currency trades occur between the major currencies. The "majors" are the most liquid because they are seen as having the strongest economies, stable governments and strong central banks. The major currencies include: EUR, USD, JPY, GBP, CHF, AUD and CAD.

What is a pip?

A pip stands for (percentage in point) which is 1/100th of 1%. In EUR/USD an example of a 3 pip spread ($30) is quoted at 1.2000/1.2003. The pip spread is how the currency trading company and the introducing broker are compensated for their services.

Is there a difference between online currency trading, Forex online trading, Forex currency trading and online foreign exchange trading?

No. All of these terms are used interchangeably with each other and are referring to the same thing.

Is there a mini forex account so I can learn forex with less risk exposure per trade?

Yes, there is a mini forex online trading account that is 1/5 of the size of a full sized forex contract.

Do you have a practice account so I can learn forex online trading without risking any real money?

How do I open a real account for Forex online trading?

What is the minimum capital requirement to open an account for Forex online trading?

The minimum account size to open your online forex trading account is $5,000 US.

What are my risks of loss in an account for Forex online trading?

Risk and profit potential are directly proportional to each other. You can lose part or all of your risk capital when investing in markets with high profit potential such as forex online trading. An account for forex online trading should contain speculative capital only.