Forex is not for the faint of heart

Forex is an abbreviated term for a foreign currency that refers to the buying and selling of world currencies over a 24-hour market cycle.

A simple explanation is that currency trading occurs when you can take advantage of the difference in the value of one currency relative to another. This is achieved through brokers and is not like trading stocks and commodities on the world stage.

Externally Forex trading looks like an easy way to make money.

This can mislead the novice investor. Currency markets are famous for their volatility. Although an investor can use extensive sources of information online to study the technical side of trading, this investor should also be aware of global developments that may affect different world currencies. This is the main side of the stock market.

Technical approach to currency trading;

Fortunately, many technical tools are available to the investor. One of the most important is a system of graphs that show the movement of each currency. These charts come in a variety of shapes, from simple to complex.

• Line Charts: The bar chart most commonly used is simply a visual aid used to see the difference between the opening and closing price of a given currency. • Historical charts: These charts use a vertical bar to show the opening and closing prices of the currency, as well as the highest and lowest prices that have occurred over a period of time. These time periods will vary and can be easily changed. • Candlestick charts: by far the most difficult of the 3 examples. In addition to providing the same information as history, an investor who understands the candlestick chart can also use the history of a particular Forex market to highlight currency trends either up or down.

Schedules can be set for multiple time frames; Day traders will use charts set for a minimum of 5 minutes, while regular short-term traders typically choose intervals of 1 to 4 hours. An expert who uses candlestick charts can use daily or monthly charts to try to account for trends.

There are many different chart indicators that an investor can take advantage of;

• Bollinger Bands


• Relative strength index

• Stochastics

• Much more ….

The basic approach to currency trading; Fundamental analysis is very different from the use of technical analysis because it is very important to know what is happening in the global currency arena. Here the investor should be able to evaluate global developments to see if one currency may have an advantage over another. These include political events and the state of the world economy.

Tracking world news can help an investor evaluate the foreign exchange market. You can trade currency to earn huge amounts of money. You can also lose all your working capital. As with any trading program, educate yourself and know your limits. Be an investor, not a player!