Get ET Markets in your own language

Is Forex Trading Legit or It Is Scam?

Clear & competitive pricing. is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # ). Forex trading involves significant risk of loss and is not suitable for all investors. How forex trading works. In forex, currencies are quoted in pairs. Let’s take the most popular currency pair as an example, EUR/USD. The first currency (Euro in this case) is called the base currency and the second (USD) is called the quote currency.

Pivot Points

NIFTY 50 11, Drag according to your convenience. As a child, I remember collecting coins and bank notes from my father, every time he would return from one of his trips abroad. The colors, the pictures, the name and sign of the currency — it would transport me to a different world — a place where I saw myself traveling to different countries around the world. As I grew, I did travel to many different countries and my collection of coins and bank notes of different currencies kept growing.

This interest in collecting different currencies soon developed into studying the connection between one currency with another and very soon into the world of trading foreign currency or FOREX as it is called.

My interest led me to www. Last week, as I was sorting through my collection of coins; my daughter asked me to explain to her what Forex Trading was all about.

I have absolutely no idea about this but would like to know and understand why it fascinates you so much. What is Forex Trading? Forex trading in simple terms is the trading in currencies from different countries against each other; for example the US Dollar against the Euro. Anyone who deals with a foreign country — be it a holiday there, or wanting to purchase something from that country or pay for a service, generally requires the currency of that country to do so.

Of course, I could pay in US Dollars too, as it is accepted almost everywhere, but that is a different story. One of the most fascinating things about this market — there is no brick and mortar marketplace for Forex trading. Every transaction is done electronically over-the-counter.

Unlike the stock exchange, the Forex market remains open round the clock with currencies traded across every time zone, five days every week. I selected one from ForexSQ and have been trading since then.

However, Forex trading is different from exchanging money at the Foreign Exchange outlets. There is much more to Forex trading than just exchanging one currency for another. The two currencies that have the highest trading volume on the Forex market are the US Dollar and the Euro — but, other currencies are traded as well.

Unlike the stock market or the futures market, where my broker offers me a leverage of 2: Now, a leverage of When you stepped off the airplane, one of your first stops probably was to exchange your money for the local currency. Forex trading turns that little airport or ATM currency exchange into a sport. A little healthy trepidation serves investors well. We strongly recommend low-cost index funds for long-term goals like saving for retirement.

And hey, this seems like a good place to note that reputable forex brokers almost always give investors access to a demo trading account. Being able to read and really understand a forex quote is, unsurprisingly, key to trading forex.

Within a pair, one currency will always be the base and one will always be the counter — so, when traded with the USD, the EUR is always the base currency. As with stock trading, the bid and ask prices are key to a currency quote.

The bid price is always lower than the ask price, and the tighter the spread, the better for the investor. Neither are you George Soros to land with a mega deal. Your condition is the most important thing that makes a trading system profitable: If you see brokers not allowing withdrawals from investor accounts, it is a sure sign of trouble.

Leave a Reply Cancel reply:. Your email address will not be published. Notify me of followup comments via e-mail. You can also subscribe without commenting.

Why traders choose

However, this was not always the case.

Closed On:

But, now with electronic trading, the spot market surpasses all others. Article by Parvinder Singh.

Copyright © 2015

Powered By