What is currency trading? This simply involves the buying and selling of foreign exchange, in other words currencies of other countries.
Why would anyone get involved with this? The answer to this is simple: to make money. Like with any other commodity, if you can buy something today and you can sell it at a profit tomorrow, you will be very happy. Likewise, if you buy for example British Pounds today and tomorrow, or a week from now, they are worth much more, you will make a nice profit in the process.
Where and how can someone become a currency trader? There are numerous websites where you can sign up for a free forex trading account. You will be able to start trading without investing any money by using a demo account.
Does a demo account work in the same way as real trading account? Yes, it does. Apart from the fact that you won’t be trading with real money, everything else will work in exactly the same way.
How will one know when to buy or sell a particular currency? The general principle is simple: you should buy when the price is low and sell again when it is high. How to know when it has reached rock bottom is not so easy. You can download free software packages that analyse technical indicators and give you buy and sell signals.
What is a technical indicator? This is simply a statistical formula (there are many) that traders use to help them decide when to buy or sell a specific currency. A well-known example is the moving average. Traders often use a price movement above the moving average as a buy signal.
Does one have to know statistics to interpret technical indicators? You don’t really need to know statistics. The software packages normally show the movements of technical indicators in a graphical format, so you can immediately see what is happening.
Where can one get free live currency prices? Some currency trading websites offer free live prices to their clients. Others charge for live prices and give delayed prices for free. The delayed prices will for example only update every fifteen minutes, every hour or even every day.
This brief currency trading tutorial only covers the most important questions. There are numerous free online trading tutorials on the web and you should get familiar with all the terms mentioned above before trying your hand at currency trading.
Discover more about currency trading with these currency trading tutorials
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