Category Archives: Introduction to Forex Markets

Background you must know before you start trading fx

Or how not to lose your shirt before you even get on the pitch

The Foreign Exchange market (Forex) is the biggest financial market in the world. More than $1.5 trillion changes hands on the Forex market each day as investors buy and sell currency in the hope that their purchases will increase in value.

Until recently, those investors were banks. The minimum investment of $200,000 dollars was enough to keep most members of the public away. That’s now changed. Managed accounts can be opened with $10,000 although some brokerage firms can even get you running for as little as $1,000 — provided you’re prepared to do the buying and selling yourself on the forex markets. In addition to the banks, investors now include multinationals, money managers, dealers and brokers, as well as private speculators.

Those investors are active 24 hours a day. The forex market officially starts trading in Sydney on Monday morning (7 pm Sunday EST) and continues around the world with traders in one part of the globe beginning their day as others end theirs. The week ends when New York traders stop at 3 pm the following Friday.

Although any two currencies which have a buyer and a seller could, in theory, be traded, in practice, more than 85 percent of all daily transactions involve the major currencies: the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and the Australian Dollar. The stable governments and the transparency of the central banks in those countries make it easier for speculators to predict what the currencies will do and to minimize risk.

And of course, there is risk in the Forex market, and that’s especially true when you’re just starting. Like any type of investment, it’s important to understand what can cause values to rise or fall, to develop an investment plan and stick to it, and to spread your risk.

The best strategies often come with practice, so a good way to start trading forex is to open a demo trade and treat it as though it were the real thing. You won’t make any money but the education could be worth a fortune!

Open a demo account with and start practising today.

Why and How to Start Trading Forex

In this article we’ll set out the reasons to start trading forex, and how you can go about it.

When you’re ready you’ll be able to open your first trading account, and start trading, and have learned to trade the currency markets for free, and be part of an exciting vibrant trading community

  • The fx/forex markets are rapidly becoming the most popular market in the world for people to start trading. They have low entry costs, very competitive offerings.
  • If you’re in the UK .. you can trade the FX markets for free using platforms like PaddyPowerTrader (Winner of our 2007 Award for Best Platform)

Paddy Power Trader

Why trading the fx markets makes sense

  • The markets are mature
  • Millions of people trade the markets every day
  • Currency is used by people across the globe in their daily lives

Trading Games?

  • There are lots of free demos and trading games, where you can practice trading before ever risking any real money
  • These often have real world financial prizes

FX Trading Platforms

There are many online trading platforms, which means you can chose the one which most appeals to you. You should consider:

  • The costs
  • The service you receive
  • The times of trading
  • The number of underlyings
  • The location and regulatoiry background (e.g. FSA registered in the UK)
  • Their extras – training activities, newsletters, advice
  • Their current customer feedback
  • Revies / Ratings
  • The advice of your independent financial advisors

Paddy Power Trader

How I got started in FX trading

Like many people I hadn’t been brought up with a lot of exposure to trading and “the markets”. In fact I couldn’t tell an option from a future, or a contract from a premium.

i was trading FX and didn’t even realise it..

One summer I went travelling from London, UK to Toronto, Canada, and it was great to have my 1 GBP be worth so much, and realise that the $20 jeans only cost me 10 pounds. But when I went back the following xmas, and shopped, then came home I was shocked on my credit card statement.. they cost me 15 pounds..

My first exposure to FX movments.. and something which is all too real to any of us that go travelling.

to be continued..