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Author:
Adrian Pablo

Everyday more and more people decide to enter the world of Forex Trading with the high expectations of having an income source that will allow them to work from anywhere in the world they may choose to live, to maintain and even improve their current life style and get all this without being attached to a cubicle and fixed schedule traditional job.

The forex markets are easily accessible these days thanks to the wide spread use of the internet around the world and the great number of brokers letting you place trades commission free and with narrow spreads. This means the profitability of forex trading is potentially very high and accessible to any one, but in order to reach that profitable stage you must first learn the ropes of forex trading, this is, you need an education.

For example you must learn what a “pips” are. If you have been interested in forex for a while, at this stage you may have heard or read already how many pips a day you can make using a particular trading system. You can learn what they are with this quick explanation. In short, currency pairs prices will go out to 4 significant digits. For example; if one currency pair is trading for 1.3451 then an increase to 1.3452 would be a “one-pip” increase in the price of this particular currency. This is an increase of one hundredth of a percent of the value of the currency pair you are trading. And depending the type of account you have, regular or mini, each pip will have a value of $10 or $1. So if you make 10 pips a day with a regular account you would have made $100 and with a mini-account $10. So now you have an idea of what a pip is.

Other of the basic concepts you must understand are those of buying and selling. Buying refers to the acquisition of a particular currency pair to open a trade, it’s quite straight to understand. Selling short refers to the selling of a particular currency to open a trade. When you Buy, you are expecting the price of the currency pair to increase with time, i.e., you buy cheap to sell high. In the case of Selling short, it looks a bit more complicated for many new traders. Here the way to make money is to initially sell a currency pair that you think will lose value in a given period of time and then, once it happened, you will buy it back at the new price but now you can sell it at the previous greater price the currency had when you opened the trade, so you earn the difference in prices. I know it seems kind of tricky, but once you are in front of your trading station, that by the way is given you free of charge by most forex brokers, it will look much simpler.

These are only a few basic concepts but there are many more things out there you must learn in order to have a good forex trading education and become a profitable trader. In short, knowledge is the key to making money in the currency markets.

Adrian Pablo is a Forex freelance writer with articles published in a number of places. Get a free report on Fibonacci Trading and learn more about the world of forex trading , visit:

=> http://www.1-forex.com

| Article Keywords: Forex

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