A Definitive Guide to Forex Trading for Beginners and the Uninitiated

Before anything else…glossary of terms

What is Forex? How does it work?

  • Major players
  • Major currencies
  • Major currency pairings

Who or what are the major players involved?

  • Central banks facilitate the monetary policies of the government in each country. The US, for example, has the Federal Reserve Bank. Japan has the Bank of Japan.
  • Banks trade currencies with one another through electronic networks.
  • Big companies participate in foreign exchange while doing business, buying and selling based on the prevailing exchange rates. Before a US-based company can buy parts in China, for instance, it must first exchange USD for Chinese Yuan (CNY).
  • Money managers are individuals who trade in the Forex market and manage investment funds on behalf of their clients, which include central banks and the government.
  • Individual traders are individuals who use their own capital to trade and speculate in the currency market. You will soon be one of them as soon as you learn more about trading Forex.

What are the seven major currencies and pairings?

  • EUR serves as the base currency
  • USD serves as the quote currency

What about Forex trading that makes it so popular/appealing?

Types of Forex traders

Benefits, challenges and risks of trading Forex

What you gain trading Forex

  • Achieve financial freedom
  • Earn additional passive income
  • Get to spend more time with loved ones because working hard to earn is no longer a top priority
  • Make a profit whether it’s a bear or bull market
  • No need to pay a commission or transaction cost

Challenges and risks of trading Forex

  • Paying a higher price
  • Difficulty in opening and funding an account
  • Fears over fund safety
  • Fear that a broker is trading against you
  • Less-responsive customer support
  • Trading is limited to Forex only
  • Low leverage
  • Scalping and/or hedging is not allowed
  • Multiple accounts are required to trade lots in standard, mini, or micro sizes
  • Wide fixed and variable spreads

How do you get started investing in Forex?

Choosing a broker

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Asia’s fastest-growing brokerage firm and disruptive force in the trading industry. Delivers unparalleled fund safety and world-class trading education.

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Fullerton Markets

Fullerton Markets

Asia’s fastest-growing brokerage firm and disruptive force in the trading industry. Delivers unparalleled fund safety and world-class trading education.

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