Forex Trading Online
The best way to invest your personal capital is to learn how to read, understand and trade in the Forex Market. This is the largest and most liquid trading market on the planet and thus leads to multiple opportunities to make a living day trading.
Within the forex market there is plenty of room for diversification determined by the pairs you decide to trade. This also allows the most freedom for day trader, over any other market, because you can trade liquid currencies early in the morning, late afternoon, evening or in the wee hours of the night.
As mentioned above, you can determine what pair of currencies you want to trade. If you have any trading experience at all you are familiar with the terms Bid, Ask, Spread, Margin, leverage… but in forex trading there are a few new terms you’ll need to become familiar with.
- Pair(s): There are always two currencies that you are trading, this is to determine the value against each other. The most traded pair in the world, the Euro against the US Dollar, we get the pair EUR/USD. This means we take 1 Euro and see what its value is in the US Dollar.
- Base Currency: This is the first currency appearing in the pair.
- Counter Currency: This is the second currency appearing in the pair.
- Pip: This is the smallest unit of price for all currencies. Almost all the traded currencies will have 5 digits such as EUR/USD equalling 1.0859. The pip would be the last digit and it it moved up 1 pip then it would equal 1.0860 and 1.0858 if it moved down 1 pip. This means that the Euro is worth $1.086 US Dollars.
Whether you’re using Forex signals (through indicators) or any other Forex trading strategies you’ll always look for movement in multiple pairs to find the best trades. The most common and liquid traded currency pairs are:
Because these currencies are all over the world there are generally active currency pairs whenever you have the time to focus to apply to trading the forex.