FOREIGN EXCHANGE (FOREX)

Here are the SECRET ingredients needed to create the ultimate business of forex:
1. You, 2. Computer, 3. Internet connection, 4. Desk (or sofa). That’s it! No employees. No advertising. No cold calling. No inventory. Imagine a business with just you, your computer, and a high-speed Internet connection?! That’s all you need trade in the foreign exchange market!! In other words... A properly trained Forex trader can potentially earn BIG PROFITS in every single month, week, or day! (Of course a poorly trained Forex trader can suffer BIG LOSSES as well.)

Let’s continue with the TOP SECRET directions:
1. Walk about ten steps and, 2. Sit in front of your computer (or sit on your sofa and place laptop on your lap), 3. Turn on computer and make sure Internet connection is working, 4. Open charts and trading platform, 5. Trade currencies, 6. Make money!, Presto! You’ve just learned how to create the ultimate business. Okay it's not that easy but you get the picture.

Consider the Following and Judge for Yourself
· You are your own boss! · You don’t need any customers! · You don’t need employees! · You can operate from home, work, vacation or anywhere else in the world as long as you have a high-speed Internet connection. · You never have to worry about job security, harassment or any other
employment-related anxiety. · You never need to worry about employer payroll, strikes, theft, rent increases, health inspectors, lease problems, being sued, etc… · You don't need to do any cold calling.
· You decide which days you wish to work. · You make the decision to take a vacation at a moment's notice. · You are your own boss!

The Skinny on Forex
What is FOREX?
The Foreign Exchange market, also referred to as the "FOREX" or "Forex" or "Retail forex" or “FX” or "Spot FX" or just "Spot" is the largest financial market in the world, with a volume of about $2 trillion a day. If you compare that to the $25 billion a day volume that the New York Stock Exchange trades, you can easily see how enormous the Foreign Exchange really is. It actually equates to more than three times the total amount of the stocks and futures markets combined! Forex rocks!

What is traded on the Foreign Exchange?
The simple answer is money. Forex trading is the simultaneous buying of one currency and the selling of another. Currencies are traded through a broker or dealer, and are traded in pairs; for example the Euro dollar and the US dollar (EUR/USD) or the British pound and the Japanese Yen (GBP/JPY). Because you're not buying anything physical, this kind of trading can be confusing. Think of buying a currency as buying a share in a particular country. When you buy, say, Japanese Yen, you are in effect buying a share in the Japanese economy, as the price of the currency is a direct reflection of what the market thinks about the current and future health of the Japanese economy.

In general, the exchange rate of a currency versus other currencies is a reflection of the condition of that country's economy, compared to the other countries' economies.

Unlike other financial markets like the New York Stock Exchange, the Forex spot market has neither a physical location nor a central exchange. The Forex market is considered an Over-the-Counter (OTC) or 'Interbank' market, due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period. Until the late 1990’s, only the “big guys” could play this game. The initial requirement was that you could trade only if you had about ten to fifty million bucks to start with!
Forex was originally intended to be used by bankers and large institutions - and not by us “little guys”. However, because of the rise of the Internet, online Forex trading firms are now able to offer trading accounts to 'retail' traders like us. All you need to get started is a computer, a high-speed Internet connection, and the information contained within this site. BabyPips.com was created to introduce novice or beginner traders to all the essential aspects of foreign exchange, in a fun and easy-to-understand manner.

What is a Spot Market?
A spot market is any market that deals in the current price of a financial instrument. Which Currencies Are Traded? The most popular currencies along with their symbols are shown below:



Symbol Country Currency Nickname
USD United States Dollar Buck
EUR Euro members Euro Fiber
JPY Japan Yen Yen
GBP Great Britain Pound Cable
CHF Switzerland Franc Swissy
CAD Canada Dollar Loonie
AUD Australia Dollar Aussie
NZD New Zealand Dollar Kiwi

Forex currency symbols are always three letters, where the first two letters identify the name of the country and the third letter identifies the name of that country’s currency. When Can Currencies Be Traded? The spot FX market is unique within the world markets. It’s like a Super Wal-Mart where the market is open 24-hours a day. At any time, somewhere around the world a financial center is open for business, and banks and other institutions exchange currencies every hour of the day and night with generally only minor gaps on the weekend. The foreign exchange markets follow the sun around the world, so you can trade late at night (if you’re a vampire) or in the morning (if you’re an early bird). Keep in mind though, the early bird doesn’t necessarily get the worm in this market - you might get the worm but a bigger, nastier bird of prey can sneak up and eat you too…

Time Zone New York GMT
Tokyo Open 7:00 pm 0:00
Tokyo Close 4:00 am 9:00
London Open 3:00 am 8:00
London Close 12:00 pm 17:00
New York Open 8:00 am 13:00
New York Close 5:00 pm 22:00

The Forex market (OTC)
The Forex OTC market is by far the biggest and most popular financial market in the world, traded globally by a large number of individuals and organizations. In the OTC market, participants determine who they want to trade with depending on trading conditions, attractiveness of prices and reputation of the trading counterpart. The chart below shows global foreign exchange activity. The dollar is the most traded currency, being on one side of 89% of all transactions. The Euro’s share is second at 37%, while that of the yen is at 20%.

TO BE CONTINUED...............