Have you ever had to go to another country and do a currency exchange? If so, you know that exchanging the money you have will either be added to in value or make it less than how much you really gave them. This is called currency conversion.
Just think of it this way. You are standing at the teller window and see a screen showing various exchange rates. All of them include different currencies and after viewing the Japanese Yen, you discover that only $1 is about 100 yen. Your incredibly excited because you think you’ll be rich with this much yen. However, the problem is that they charge a lot of yen in Japan – even for small items. For example, after you go to the store to pick up a few snacks – nearly all of your 100 yen is gone. This may lead you to feel disappointed.
The Forex Market is much like this – however, if you know what you are doing, you can make tons of money.
You are literally exchanging one particular currency for another. Let us imagine that you’re an American who just visited Japan and you went to trade all your American dollars in exchange for yen. Prior to going back home, you decide you want to go to the exchange booth since you still have some yen left. You see that the exchange rates have changed. This is exactly what happens in Forex market. People will make money or lose money in the foreign exchange market depending on the rate of exchange. Most of them get in and get out before any change happens.
Most people refer to Forex as “FX” and it is one of the biggest financial markets within the world. For example, if you compare it to the $22.4 billion per day volume from the NY Stock Exchange Center, it earns $5 trillion every day. Imagine how many people are trading in order to accumulate this kind of money.
The Forex Market looks like a monster in comparison with the NY Stock Exchange and continues to grow every day. You will always see trends on CNBC about the market and some of the stocks that are represented as well.
Did you know that in comparison with the NY Stock Exchange Center – the Forex market is 200x larger? However, retail traders are the ones who will trade the spot market which equates to a total of $1.49 trillion. Although the media wants you to think the Forex market is the all consuming market – it’s really not.
When you learn about the Forex market, one thing you will to do is find out and understand the terms. This could be anything from currency codes or currency pair terminology. Without learning everything you need to know, you could easily lose money. This is why it’s so important to sit down and study all of this information prior to starting.
If you are looking to become a successful Forex trader and learn everything you possibly can, it’s a good idea as well to start learning from others around you. There are hundreds of Forex traders that offer classes and private training. Also, online webinars and courses will help you with your Forex trading journey. You want to collect as much information as possible before you start.
