Getting Started in Currency Trading- Winning in Today's Forex Market

 About This Book

This book is intended to introduce the novice investor to the exciting, complex, and potentially profitable realm of trading world currencies on the foreign exchange markets (FOREX). It also serves as a reference guide for stock and futures traders who wish to explore new trading opportunities. My primary focus is on the rapidly expanding and evolving online trading marketplace for spot currencies, generally referred to as retail FOREX.

From the beginning I must emphasize that currency trading may not be to everyone’s disposition. The neophyte investor must be keenly aware of all the risks involved and should never trade on funds he or she deems necessary for survival. Currency trading is a form of speculation—attempting to profit by absorbing a risk that already exists. This differs from gambling in which one creates a risk in order to take it. Savings and investment should be covered before considering speculation. If you have some experience with leveraged markets such as futures or options, you owe yourself a look at FOREX. Those who have never traded will find it the most laissez-faire of all speculative adventures.

BROKER: 

How This Book Is Organized

There are six main parts to this book:

1. Part 1—The Foreign Exchange Markets

The FOREX Landscape, A Brief History of Currency Trading, Two

Ways to Trade FOREX.

I open the book with a brief overview of the FOREX markets, an event-by-event–based historical overview of currency trading, and the two primary methods for participating in the markets as a retail trader. I hope to dispel any myths the reader has about FOREX.

The FOREX Landscape 3

Introduction—What Is FOREX? 3

What Is a Spot Market? 3

Which Currencies Are Traded? 4

Who Trades on the Foreign Exchange? 4

How Are Currency Prices Determined? 5

Why Trade Foreign Currencies? 6

What Tools Do I Need to Trade Currencies? 8

What Does It Cost to Trade Currencies? 9

FOREX versus Stocks 9

FOREX versus Futures 10

Summary

A Brief History of Currency Trading 13

Introduction 13

Ancient Times 13

The Gold Standard, 1816–1933 14

The Fed 14

Two Ways to Trade FOREX 21

Introduction—Futures Contracts 21

Currency Futures 22

Contract Specifications 22

Currencies Trading Volume 23

U.S. Dollar Index 23

Volume and Open Interest 24

Where to Trade 25

FOREX Futures 25

Summary 25

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