Q:

How can you learn to trade in Forex currency?

A:

Quick Answer

Free, Internet-based foreign currency trading courses are available from websites such as Daily FX.com, XE.com, FXCM.com and Avatrade.com. Prospective traders can also download free training materials from the websites of organizations such as the National Futures Association.

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How can you learn to trade in Forex currency?
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Full Answer

Forex trading operates in a similar manner to stock trading, with traders purchasing undervalued currencies and selling them when prices rise, explains XE.com. The difference between the two values is known as the spread, and this constitutes the profit. Currencies are always quoted in pairs because forex trading involves the comparison of the relative values of different currencies.

A USD/EUR pair, for instance, shows the number of euros that can be purchased with one U.S. dollar, explains XE.com. Seen from this context, a trader who expects the U.S dollar to rise in value against the euro would purchase American dollars with euros, then sell back the U.S. dollars when their value rises.

Forex trading is very risky, warns XE.com. For this reason, this form of trading may be unsuitable for individuals below a certain income threshold or those with limited experience. Prospective forex traders should critically examine their investment objectives and risk profiles before engaging in currency trading, and they should only invest what they are willing to lose. The advice of a professional financial advisor can be valuable with this type of trading.

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