Initiating A Rookie Into Forex Business

The question we first need to ask is what is the forex market?

The forex market acts as medium to trade different currencies against each other. It is used by banks, central banks, governments and big corporations to hedge their currency holdings in the event of either a devaluation or revaluation as this can have undesirable effects on their balance sheets.

Then we have currency speculators who are into the business to simply to make money, whether a currency goes up or down. In currency trading, speculators are involved in buying and selling of currencies in a market with a daily turnover of $1.9trillion.

Traders speculate on the dollar, euro, yen, British Pound and many other currencies and make their profits based on the pips or movements in the price.

The market operates 24hrs a day, 5 days a week and it is very liquid.

The beauty of forex trading is that you need only a little to start with as many have commenced trading with as little as $100. Profits in the business defy logic with traders able to quintuple their money within days!

Prior to the start of actual trading, many rely on a demo account from which hopefully they would have learnt the ropes of the business. It is advisable that demo trading is carried out for 30 - 60days. This is due to the high risk nature of forex trading and the technicalities involved.

Good tutorial trading is essential to succeed in the business. Many either go for seminars, or purchase e-books or tutorial videos on the subject. Many join forums to enable them mingle with other traders and get access to what they hope may be profitable tips to enable them strike a fortune.

The business of currency trading is primarily carried out online and a a trader can check his stats anytime. An internet connection is therefore a must whether at home, office or at a cafe.

The basic factor for success in the business is the ability of one to fully understand how to apply both the technical and fundamental analysis when trading forex.

Fundamental analysis is simply the ability to speculate how the market will move based on information provided. For instance, an increase in the interest rates by the apex bank usually leads to a strengthening of a currency.

Technical analysis is much more scientific which relies on computer models which are based on patterns or trends observed in the markets over a period of time.


The sensible fusion of these two methods can yield enormous profits. The author however believes that fundamental analysis is the superior of the two.