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Learning Forex Trading

Aug 18, 2007
The word Forex comes from Foreign Exchange and it is a global market where you can deal with various currencies at different rates. Everyone buys and sells currencies and hopes that they make some profit after the value of the currencies they bought will change in their favor.

It is the fastest and safest way to invest your money and you could start right now because forex is made mostly on the internet. You can do a research to find which website offers the best accounts so you can start investing your money; there are no taxes or fees from your earned commission and you don't have to sign any papers.

Before you start with forex you should understand some basic principles and search for as many websites or books you can for this. There are plenty of seminars, video tutorials, e-books and so on where you could start learning from. The most important factor in order to succeed in forex trading is to have discipline.

If you learned a simple method and trust in it then you will gain discipline even if you lost some money with it. It is a good idea to open a demo account before investing money on the real market; you should be able to determine when to enter or exit the market. Now that you managed to learn all these things let's see which are the two fundamental strategies in investing in forex: 1. Technical Analysis.

This strategy is used by small and medium size investors; it is based mostly on graph reading and understanding and interpreting signals from financial statistics. There are three assumptions that this strategy is based on: Markets discount when all fundamentals show up in the price, Trends persist when you can see all long term trends by looking at any currency chart and History repeats itself when all things happened in the past will happen again. 2. Fundamental Analysis.

This strategy analyzes the actual situation in the currency country, the bank interest rate, inflation rates and so on. Many people combine technical analysis with fundamental analysis in order to draw entrance and exit points. There are many indicators on this strategy but the most important are: International trade can be considered a negative indicator when there is a trade deficit ,this happens when more money leaves the country to buy goods than the money that enters the country; Interest Rates ;the measurement of CPI (Cost per living), PPI,PMI and so on.

In US there are 28 main indicators. Now that you understood some terms you can easily manage to invest some money with Forex. But do no forget that today you can invest 10$ and win 1000$ and tomorrow you can loose all of your profit.
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