Forex Basics

If you've already read the "What is Forex?" section then you should know what Forex market is and what it is all about. If not, please, do it. There are five essential aspects of foreign currency market a beginner trader (and an old one as well) should be aware of:

Forex Fundamental Analysis

Forex Technical Analysis

Money Management

Forex Trading Psychology

Forex Brokerage

Understanding and mastering these sides of trading are crucial to organize your Forex trading experience.

Forex Fundamental Analysis

Fundamental analysis is the process of market analysis which is done regarding only "real" events and macroeconomic data which is related to the traded currencies. Fundamental analysis is used not only in Forex but can be a part of any financial planning or forecasting. Concepts that are part of Forex fundamental analysis: overnight interest rates, central banks meetings and decisions, any macroeconomic news, global industrial, economical, political and weather news. Fundamental analysis is the most natural way of making Forex market forecasts. In theory, it alone should work perfectly, but in practice it is often used in pair with technical analysis. Recommended e-books on Forex fundamental analysis:
Reminiscences of a Stock Operator
What Moves the Currency Market?
Forex Technical Analysis
Technical analysis is the process of market analysis that relies only on market data numbers - quotes, charts, simple and complex indicators, volume of supply and demand, past market data, etc. The main idea behind Forex technical analysis is the postulate of functional dependence of the future market technical data on the past market technical data. As well as with fundamental analysis, technical analysis is believed to be self-sufficient and you can use only it to successfully trade Forex. In practice, both analysis methods are used. Recommended e-books on Forex fundamental analysis are:
The Law Of Charts
Candlesticks For Support And Resistance
Trend Determination
Money Management in Forex
Even if you master every possible method of market analysis and will make very accurate predictions for future Forex market behavior, you won't make any money without a proper money management strategy. Money management in Forex (as well as in other financial markets) is a complex set of rules which you develop to fit your own trading style and amount of money you have for trading. Money management play very important role in getting profits out of Forex; do not underestimate it. To get more information on money management you can read these books:
Risk Control and Money Management
Money Management (A chapter from The Mathematics of Gambling)
Forex Trading Psychology
While learning a lot about market analysis and money management is an obvious and necessary step to be a successful Forex traders, you also need to master your emotions to keep your trading performance under strict control of mind and intuition. Controlling your emotions in Forex trading is often a balancing between greed and cautiousness. Almost any known psychology practices and techniques can work for Forex traders to help them keep to their trading strategies rather to their spontaneous emotions. Problems you'll have to deal while being a professional Forex trader:
Your greed
Overtrading
Lack of discipline
Lack of confidence
Blind following others' forecasts
These are very professional books on psychology written specially for financial traders:
Calming The Mind So That Body Can Perform
Emotion Free Trading
The Miracle of Discipline
Forex Brokerage
Every Forex trader like any other professional needs tools to trade. One of these tools, which is vital to be in market, is a Forex broker and specifically for Internet - on-line Forex broker - a company which will provide real-time market information to trader and bring his orders to Forex market. While choosing a right Forex broker things to look for are the following:
Being a professional company you can trust
Provide you with real-time quotes
Execute your orders fast and accurately
Don't take a lot of commissions
Support the withdraw/deposit methods that you can use
For beginning Forex traders I recommend these four brokerage companies that are probably the best Forex brokers to start with:
FXOpen — one of the most popular and progressive brokers with MetaTrader platform and comfortable trading conditions for all kind of traders.
InstaForex — a reputable MetaTrader 4 brokers, allows Islamic Forex trading accounts, while you can deposit and withdraw money via WebMoney.
FXcast — good because you can start trading Forex with as little as 10$, use MetaTrader 4 platform and the dozoen of various deposit and withdraw methods, including WebMoney, e-Bullion and wire transfer.
LiteForex — broker that supports MetaTrader 4 Forex trading platform and doesn't require a lot of money to start with.

Do people really know what’s a forex broker is? And what’s it’s connect to forex trader? For those who don’t have any idea, a forex broker are the one who makes money from the buyer that pays for the currency and for the seller and of what it will receives for the sale. This is like the way a market maker makes money.
With this kind of strategy, only few people are aware or get involves with forex brokers and foreign exchange trade and even until now. Before only large banks, large corporations or big investors are only the one who grabs the advantage of foreign currency market. But, since internet also widely emerged in the world, many of forex broker are now allowed people to open their own accounts and just trade through in the internet. Anyone who has the interest in trading are now allowed to bigen their trade even in the internet.
Although, this kind of work now are much easier than before because of the internet, being a forex broker is still not easy. To become a good forex broker should provides training and assistance in both. And because a forex trader also needs a good forex broker, you should always provide those two words. And if you can’t have those two, never tried to become a forex broker coz it will not surely fit you.

The Forex market could move against you. No one can predict with certainty which way exchange rates will go, and the Forex market is volatile. Fluctuations in the foreign exchange rate between the time you place the trade and the time you attempt to liquidate it will affect the price of your Forex contract and the potential profit and losses relating to it. To avoid losing all of your investment capital, you should have a pre-arrangement on your risk profile. A solid risk profile will limit the Forex dealer not to overtake risk that you cannot handle. For example, if you have 100,000 to invest, you can say that you are willing to risk 10,000 of that capital with the potential to gain another 100,000. This can be easily implemented by a fund manager, so your losses can be limited to 10% or 5% of invested capital.

One of the best methods to avoid unnecessary risks is avoid fraud dealer.
Forex is a special trading business with no centralized market. Thus, unlike regulated futures exchanges, there is no central market place for Forex buyers or sellers therefore the price offered by different Forex dealers may vary a lot. When you are trading in Forex market, you are totally relying on the dealer’s integrity for a fair deal.
Further more, you need to select a right Forex dealer to avoid scams. There may be Forex dealers that are not regulated legally and there maybe investment scams, especially on the Internet. Be very careful on who you are dealing with in Forex and always check cautiously on the investment offer.

In trading forex, there are many things that you should know in dealing with the forex market, and you also need to understand the nature of this niche if you’re goal is to become successful in the business. Surely, you have already heard of some of those terminologies like forex and fx (shortcuts for foreign exchange), currency trading market, currency market, etc… all of which are different names for the market. Generally, the forex market is an international market wherein the currencies of different countries are traded and exchanged.

Every nation in the world is involved in the market, so there's always the possibility of trading and exchanging currencies with most of the nations. That's why it runs 24 hours a day and five days a week, starting at 5pm EST (Sunday) and ending at 4pm EST (Friday), New York. And in here, currencies are being traded and exchanged.

The market began when the U.S. abandoned the gold standard (which gave every currency a value related to the U.S. dollar and was introduced for the purpose of stabilizing the world economy back then) and the values of all the other currencies had undergone change, with the banks opting to exchange currencies for profit (buying low and then selling high), rather than just being a passive means of transferring and exchanging money from one country to another country (and this made each currency a commodity that can be traded from then on).

Common exchanges/trading involve the U.S. dollar against other currencies like the British pound, euro, Australian dollar, Japanese yen and Swiss franc, but it’s always possible to trade any of these currencies with one another. The value of a currency determines the value of the nation: if one nation is successful, then its currency increases, but if it is undergoing crisis, the value decreases. Take note that these fluctuations can be huge and will happen very fast, involving huge sums of money. Today, the total worth of transactions in the market reaches around $2 trillion dollars per day.

International banks, major corporations, investment banks and other large financial institutions govern the forex market, but it is possible for a private individual to trade in the market through brokers (with the Internet, this has become very common today). Many forex traders do business through their own PC in their own homes (these traders comprise 2 percent of the entire forex market). The systems used by these individual traders concentrate on lesser pairs, like the British pound against the euro.

The Forex market is truly a very big arena that will really dwarf the individual trader, but as long as you have the little capital that you’re willing to risk in the process, then you’re in! At times, you can start up with as little as $250. The forex demo account is great if you are one of the novices in trading, as it will serve as a practice for you to learn the basic principles of the market, before you invest a single cent and go into the real thing!

The British Stock Exchange or the London Stock Exchange is undeniably the global leader in trading of stocks in financial community. It owes’ its existence to its humble beginnings in one of London’s coffee houses in the late 16th century. At 300 years old, this prestigious financial giant holds the unbeatable record of being the first, and the oldest stock exchange house in the world, not to mention one of the busiest stock exchanges. A look at the British Stock Exchange milestones, is also, therefore, a history of this country’s financial milestones. In 1698, the first list of stock and commodity prices is issued in the Jonathan Coffee house. The stocks, called “The Course of the Exchange and other things”, are the first recorded financial activities in London. In 1761, one hundred and fifty stock brokers form a club, to buy and sell shares. In 1773, these brokers christen their financial house as “The Stock Exchange”. Finally, on March 3, 1801, the stock exchange market, as we know it, became a regulated financial exchange with the issuance of formal membership subscription basis. Despite the emergence of a number of stock exchanges all over the world, The London or British Stock Exchange remains a significant hub for international trading activities and because of its considerable experience, offers many valuable services. Here are some of the key services and benefits; you can avail of as a member: As a first time trader, you can be assured of guidance and training on the Exchanges rules and regulations, especially on the legal aspects. These training and consultancy session have all been created to help you understand and use this knowledge advantageously to trade in the markets you’re at. You’ll gain access to trade in different markets that offer a wide range of securities, equities, AIM securities and depositary receipts. You’ll learn about the dynamics of trading, the services and products of the British Stock Exchange’s other members, with their prices and contract details. How would you want to conduct your real-time trading activities? The exchange offers you a choice from the following: connect via Extranex (the exchanges’ direct link), CREST, or the STX, which is a private telephone network for securities professionals. Due to the British Stock Exchange’s expertise gained from centuries of stock trading, you can depend on having your company expertly steered to marketsThe British Stock Exchange or the London Stock Exchange is undeniably the global leader in trading of stocks in financial community. It owes’ its existence to its humble beginnings in one of London’s coffee houses in the late 16th century. At 300 years old, this prestigious financial giant holds the unbeatable record of being the first, and the oldest stock exchange house in the world, not to mention one of the busiest stock exchanges. A look at the British Stock Exchange milestones, is also, therefore, a history of this country’s financial milestones. In 1698, the first list of stock and commodity prices is issued in the Jonathan Coffee house. The stocks, called “The Course of the Exchange and other things”, are the first recorded financial activities in London. In 1761, one hundred and fifty stock brokers form a club, to buy and sell shares. In 1773, these brokers christen their financial house as “The Stock Exchange”. Finally, on March 3, 1801, the stock exchange market, as we know it, became a regulated financial exchange with the issuance of formal membership subscription basis. Despite the emergence of a number of stock exchanges all over the world, The London or British Stock Exchange remains a significant hub for international trading activities and because of its considerable experience, offers many valuable services. Here are some of the key services and benefits; you can avail of as a member: As a first time trader, you can be assured of guidance and training on the Exchanges rules and regulations, especially on the legal aspects. These training and consultancy session have all been created to help you understand and use this knowledge advantageously to trade in the markets you’re at. You’ll gain access to trade in different markets that offer a wide range of securities, equities, AIM securities and depositary receipts. You’ll learn about the dynamics of trading, the services and products of the British Stock Exchange’s other members, with their prices and contract details. How would you want to conduct your real-time trading activities? The exchange offers you a choice from the following: connect via Extranex (the exchanges’ direct link), CREST, or the STX, which is a private telephone network for securities professionals. Due to the British Stock Exchange’s expertise gained from centuries of stock trading, you can depend on having your company expertly steered to markets