what is Forex market? and how the beginners trade into that.

 Forex market? 

Foreign exchange Forex trading is buying or selling one currency in exchange for another, in an attempt to extract a profit from the price movements. All currency trades involve two currencies, and trades are facilitated by a forex broker.The forex industry is not heavily regulated and provides high leverage.currency market open a 24 hours during in a week, which is an advantage over the stock market which is only open for the portion of each week day. 

These articles provide an overview of these crucial basics, including what a currency pair is, currency pair symbols, trading hours, position sizing and pip values, how profits are made, leverage, capital requirements for trading, forex brokers and trading fees.

What You Need to Know About Forex Trading

currency pair in Forex trading
Any forex trade actually involves two currencies.eg- If you are going on a trip to Europe, you take your US dollars and exchange them euros. That's a currency transaction—exchanging one currency for another. Forex traders do the same thing, except they are attempting to profit from changes in the prices of the currencies.

Currencies are always quoted relative to one another, called a pair. For example, the (EUR/USD) is the price of US dollars relative to euros.

There will be a price associated with the currency pair, and that price will constantly change. For eg, if the price is 1.1000, that means it costs 1.10 US to buy one euro. If the rate was 1.2525, then it costs 1.2525 US to buy one euro.

The most heavily traded currency pairs in the world are associated with the US dollar and other major global currencies, including the Japanese yen (symbol: JPY), British pound (GBP), Australian dollar (AUD), New Zealand dollar (NZD), Euro (EUR), Swiss Franc (CHF) and the Canadian dollar (CAD). Therefore, the more commonly traded currencies are the EUR/USD, GBP/USD, AUD/USD, USD/CHF, NZD/USD, USD/JPY and USD/CAD.

Whatever order the currency pair is in reflects how much the second currency costs relative to one unit of the first, as mentioned above. All other global currencies also have symbols. Any symbol can be combined with another symbol to create a pair. That pair will then have a price based on how much of one currency it costs to buy the other.

Forex Position Sizes and Pip Values

Currency pairs move in increments called pips. A pip is the fourth decimal place in the price of a currency pair. For example, in 1.1153, the forth decimal place (2) is worth one pip. If the price moves up to 1.1154, that is a one pip move.

currency pairs are often quoted to five pips the fifth decimal place is a fraction of a pip. eg, if thr price moves from 1.22225 to 1.22230, that represent a half pip(0.00005) move.

 In pairs that involve the JPY, a pip is represented by the second decimal place. For example, if the price moves from 110.25 to 110.26, that is a one pip movement. The third decimal place, which is often provided, shows fractional pip movements.

Pips matter because pip movements determine profits and losses (discussed next). One of the major determinants of those profits and losses is the position size. Most forex brokers allow traders to trade in $1,000 increments (or other units of the currency, depending on the currency being traded).

If buying/selling 1,000 worth of the EUR/USD, one pip of movement will result in a $0.10 gain or loss. This is called the pip value. Buying/selling 10,0000 worth of the currency pair will result in a $1 gain or loss for each pip of movement. A 100,000 position means gaining or losing $10 per pip of movement.

 1,000 units of currency is called a micro lot, 10,000 worth of currency is called a mini lot and 100,000 is called a standard lot. It is possible to trade in multiple lots, for example a trader could sell seven micro lots, which means a pip of movement will result in a $0.70 gain/loss.

Unfortunately, these pip values only apply when the USD is the second currency in the pair. For pairs that don't involved the USD, or where the USD is listed first, the pip value will change as the price of the currency pair fluctuates. Pip values can also vary based on the currency deposited into the account (since buying a currency pair with yet another foreign currency means there are multiple transactions occurring). For a full rundown on pip values, see Calculating Pip Values.

  

How Profits are Generated in Forex Trading.

Trading Forex takes into account all that we have learned so far. We can buy or sell a currency pair, and whether that price moves in our favor will determine if we make or lose money. The amount of that profit/loss is determined by how many pips the price moves, the position size and the pip value.

Most Forex traders use price charts to help determine which trades they will take. If they believe that the EUR/USD is going to rise, then they will buy the EUR/USD. The first currency in the pair is the "directional currency" on the chart. If the EUR is expected to rise relative to the USD, the price on the chart will rise. If the EUR is declining, the chart will show the pair falling.

Assume a trader believes the EUR/USD, which is currently trading at 1.05250, will rise. They buy one mini lot of that currency (10,000). The price does rise to 1.05450, and the trader exits. This is a 20 pip gain, and each pip is worth $1. Therefore, the trader made $20 on this trade. If instead the price dropped and the trader closed out the position with a loss at 1.05170, they lost 8 pips or $8 in this case.

Forex traders use a number of tools and strategies to help them decide when to get into trades, when to cut losses and when to take profits.

How much Forex leverage?

Gains and losses are magnified with the use of leverage. Leverage is borrowing money from the broker to increase the amount of capital available for trading. Forex brokers typically do not charge interest on borrowed funds/leverage.Let's assume a trader deposits $1,500 into a Forex account, and they get 10:1 leverage. This means the trader can take positions up to $15,000 (or 1.5 mini lots). Let's use the same example as before.

this is some basic overview about Forex trading there is  lot to lern about forex market.this is just the tips of the iceburg.try to lern more about it.before trading a real capital open a demo account and trade some fake money this is the best way to intract with the market and learn without risking any capital.

 

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                                                                                                 cory mitchell