If you interested in Forex trading and but you are new to it, then you should read this article. This article will contain all the basic information of Forex and become a door opened to the world of Forex.

For starting, you must learn those jargons that are used in the world of Forex. “Pips” is the vocabulary word that we are talking about. It is perhaps the most used word in forex trading. Overall, in forex, currencies are quoted in 4 decimal places instead of 2 decimal places. For example, $1.1288. So one movement plus or minus of the one thousandth is considered as 1 pip movement. For example, if one currency pair is quoted as $1.1288, one pip increase is $1.1289 while one pip decrease is $1.1287.

Let’s discuss the type of account in Forex. In Forex, you have a choice to open a regular/standard account or a mini account so each pip could have the value of $10 or $1. So if you profit 10pip of movement, it can be either a $100 profit for a regular/standard account or $10 profit for a mini account. Depend on your leverage.

Now I will discuss the most basic concepts of selling and buying in Forex market. You can make money in both sides of the trade. Either you make money from a long view(a view that the currency will increase) or a short view(a view that the currency will decrease)

So as you learn forex and understand how the foreign exchange markets work day to day, you are will be rest assured that these simple concepts will form part of your foundation of forex trading. You will need to remember and understand the definition of a pip, your account types and finally how you enter a trade either with a long or short view.

Below is some of the jargons that you should pay attention on:

Buy Quote - This quote stands for the price that you can buy the base currency for.

Cross rate - is used to express the values between the two currencies when it’s not involving the USD.

Resistance - A high point in a market chart that rescues frequently and where the market will begin a bearish.

Support - A low point in the market chart that recurs frequently and where the market will begin a bullish.

Pivot points - is a short-term trend datum that analysts use as a tool to forecast low (support) and high (resistance) points of the chart. If one of those points is broken it’s expected to create a trend in the same direction.

Going long - investing in the leading currency against the counter currency.

Going short - investing in the counter currency against the base currency.

Lot - $100,000 contract value.

Mini Lot - $10,000 contract value.

Pips - the smallest rise of a change in price (1/10,000 of the value).

Currency shortcuts:

1. USD (U.S. dollars) also known as Greenback, buck

2. GBP (United Kingdom pounds) also known as Cable, sterling, pound

3. CAD (Canadian dollars) also known as Loonie

4. AUD (Australian dollars) also known as Aussie

5. CHF (Swiss francs) also known as Swissie

6. JPY (Japanese yen)

7. EUR (European euros)

8. CNY (China Yuan)

9. HUF (Hungarian Forint)

10. INR (Indian Rupee)

11. THB (Thai Baht)

12. KRW (Korean Won)

13. MXN (Mexican Peso)

14. PLN (Polish Zloty)

15. ZAR (South African Rand)

16. CZK (Czech koruna)

17. HKD (Hong Kong dollar)

18. SGD (Singapore dollar)

This is a post that generally for those who new to forex trading or intend to get started with forex trading. If you read my post - “How Forex can make you be financial free faster!", you already knew what kind of advantages that Forex trading has. If you haven't read it, you can click on the link and read it first, I will wait for you

Today I just came across an articles in about.com which about Foreign Exhange Market or FOREX that I always mentioned here. After reading this article, you will learn about the :

1. Foreign Exhange Rates
2. Basis Points of Forex
3. Forex Market and,
4. Forex Exchange Spreads

Without wasting your time, you may read the whole article here : The Foreign Exchange Market

I always heard that people want to achieve financial freedom or being rich as fast as they can. Maybe they are totally fed up with their current life and can not stand at their current condition anymore. Yes you can achieve financial freedom if you are using a right way. Today I'm going to share with you what is Forex and how you can leverage on it to be financial free FASTER!

The Foreign Exchange, also called as “Forex" or “FX", is a market where currencies are traded. Forex market is the biggest liquid financial market with an average traded value around $1.5 trillion per day. It is hard to determine an exact number. Forex market is open 24 hours a day, 5 days a week - 00:00GMT on Monday to 22:00GMT on Friday. In forex market, the currencies are being traded among the major financial centers in London, New York, Tokyo, Frankfurt, Hong kong, Singapore, China, Paris and Sydney. Different country have different time zone and this is why forex market is open 24hours.

Benefits Of Forex in achieving Financial Freedom

In year 2004-2005, I involved in Forex trading. I'm not really involved since I just trade using demo account. I really gained a lot of trading experience at that time and I found that forex can help us become financial free Faster because of certain “features" on Forex that we can not found in other investment. Below is the list:

1. Leverage, 1:100 - 1:400 Forex can let us leverage on our money. For example, if the rate is 1:100, for every dollar you invest, you can get the effect of investing $100 or more. What does this means to you? First you can invest in forex with a small amount of capital and everyone can invest in forex without any big capital. Second you can leverage on forex and increase your capital faster. If you read my post Cash flow & Capital Gain, 2 points that you must focus to achieve financial freedom then you will understand how important capital gain in achieving financial freedom.

1. Trading Time Forex market is open 24 hours a day, five day a week, with currencies trading around the world in major financial centers in London, New York, Tokyo, Frankfurt, Hong Kong, Singapore, China and Sydney. This is an advantage for you because you have a longer trading time in forex than other investment. However it is not advisable to trade 24 hours, 5 days a week. You must learn to select certain time frame and invest long term or short term. From my experience, the more hours you trade, the chances that you will loss money is higher due to your emotion. The price of currencies are changed in a “up and down mode". The longer you follow the price changes; you will start afraid of losing money and make a lot of wrong trading and ends up losing money.

1. High Liquidity Forex market is a high liquidity market. It means you can invest and take out your money from forex market very easy. For example, a part of my plan to financial freedom is investing in forex market for capital gaining, then I take out the money from it and go for Real estate and business investment to get passive income. First I leverage on forex to increase my capital, then at the same time I search for profitable real estate or business, since forex market is high liquidity, I can take out my money from forex and invest in real estate and business that I found is a good deal.

1. Small initial investment Because of its “leverage" feature, you actually don't need a lot of money to start trading in forex. If you go through the major forex trading company, you will found that with as little as $500, you can start trading in forex and earn money. However, I don't recommend this. From my experience, the more money to invest, the lower risk you can loss your money. It is ok if you don't understand what happen here, but I will make a more detail explanation later in my future post.

1. Flexible Settlements Foreign Exchange can be tailored to specific investment objectives. Investors may choose from different trade strategies based on financial goals and needs, whether it is aggressive, conservative, long-term or short. From my experience, I make more money if I invest in long-term, for example, hold a position for more than 3 days or 1 weeks. Of course, if condition approves, I also invest short term and become a day trader. However, the risk is high and I don't make as much as money in longterm.

1. Analyze a Nation like a Corporation Currencies are always traded in pairs - one currency is purchased with holdings in another. As with stocks, better FX returns are provided by the currency of a country that demonstrates faster growth and is in a better economic condition that others. So to me it is more easy to research in forex market.

Conclusion

Foreign Exchange market trading is a fast growing field that offers some significant advantages over other investment methods. However many people are reluctant to involved simply because they lack the necessary knowledge. But once you get used of it, forex really a great investment tools to implement in your financial freedom plans especially in capital gaining section.

1. Trade according to the Trend - Trend is just like the current in the sea. It is hard to swim against the current. So as market. No matter you invest long term or short term, you must invest according to the trend. So I think the first basic step that we should learn before we jump into market is learning how to read trend.
2. Stop loss - We are not a god, and we make mistakes often in life or in Forex. To survive, we must learn how to protect ourselves from big losses. An Exit and Entry strategy should be planned before investing in Forex. Be discipline and always trade according to your plan. Be flexible and modify your plan from time to time to meet your trading behavior.
3. The Resistance and Support - Knowing how to read and analysis the resistance and support level is a basic but important investing skill in Forex trading. Every one of us hopes that we can earn big but loss small in trading. In forex, the price does move in a straight line. It move in a current format - up and down. This is because the effect from the resistance and support point and also the real time trading (buy and sell) of investor. So you can maximize your profit if you know the resistance and cut down the losses if you know the support.

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Above are the 3 rules that I can think about right now. I believe there are more as Forex is a always changing market. ÂÂ