What is foreign exchange trading? The term “foreign exchange trading” can mean different things. Whether you go with a bag full of currency to banks and foreign exchange to sell more expensive Euro (for more lei) and then, with those lei to buy cheap US dollars and when they become more expensive and sell them to buy another currency.

Most often, the term forex trading is understood as buying and selling currency on the foreign exchange market (or “Forex”) with the intention of making money, often referred to as “speculative Forex trading”. Following the permanent rise and fall of the price of currencies (it moves almost every second) there are opportunities to profit by buying cheap and selling more expensive.

How Forex Works

The exchange rate is the rate at which one currency can be exchanged for another currency. It is always quoted in pairs, such as EUR / USD (euro and US dollar). Exchange rates fluctuate based on economic factors such as inflation, industrial production and geopolitical events. These factors will influence whether you buy or sell a currency pair.

Example of Forex trading:

The EUR / USD rate is the number of US dollars a euro can purchase. If you think the euro will rise against the US dollar, you will buy the euro against the US dollar. If the exchange rate rises, you will sell the Euros back, making a profit. It should be mentioned that these transactions are carried out through an online software, free of charge and anyone can practice with virtual money or as much as they need before opening real money transactions.

Why currency trading?

Forex is the largest market in the world, with a daily volume of approximately 5.2 trillion US dollars and 24-hour market action. In other words, you only need a computer (or smartphone) and an internet connection to become a participant in the foreign exchange market. The key factors that differentiate between the Forex market and the Stock market are:

  1. Many companies do not charge commissions – only a small difference between the sale price and the purchase price (as in foreign exchange).
  2. There are 24 hours of trading per day so you decide when to trade and how to trade.
  3. You can trade on leverage, this will allow you to trade with larger amounts than you have in your account.
  4. Forex is affordable – you don’t need too much money to get started. Our partner brokers allow you to open orders even with a $ 10 investment.

What it takes to succeed in Forex trading

First of all, you have to practice as much as you need on a virtual account (with demonstration money) , the good part is that our partner brokers offer the possibility to practice for free and in real market conditions. There is no difference between a demo account and a real one in terms of trading conditions, currency price and the rest. Moreover, the platform is represented in the simplest form so that anyone who can use a Facebook account, for example, can see the price, open, close and modify a currency transaction. Also for a faster learning, you can watch online lessons , which are also absolutely free.