Currency Trading Basics – The Seven Basic Elements of Currency Trading
To be successful at learning the currency trading basics otherwise known as forex, information is king. It has been said that the closer you are to the information the better the information it is. The major benefit of trading forex is this information you know about a given currency or other inside information can be used for your benefit.
Pips are used to measure changes in the price of a currency pair. So you might see a report that EUR/USD fell by 10 pips this morning. Why don’t they say it in dollars and cents? The reason is that not all forex trades involve the dollar, and even where they do, it may not be the quote currency. If your pair was EUR/JPY, you would not want to measure changes in dollars and cents.
The daily volume of this world’s largest financial market is over $4 trillion. The Forex market deals in the trading of currency. One currency is bought while the other is sold. This currency trading is done through a dealer or broker, and this is done in pairs.
You need to know about swing trading forex as the currency market is subject to upswings and downswings on a regular basis. Swing trading is a day trader’s basic currency trading technique and unless you master it, you cannot make profits on the go. It is the only way you can make money in the long term and make your forex trading more profitable than any other speculative trades. Round the clock trading and dependence on futures are growing among investors.
These traders learned quickly, they only used a very simple system, with strict money management rules but they made fortunes. Dennis knew though that anyone could learn to trade a system, that’s the easy bit of currency trading, the hard part is applying a trading system with discipline.