| The Forex was founded in 1971. Today the current | | | | This information leads us to the last important |
| turnover of the Forex is said to be between 1 and | | | | assumption made when using technical analysis - |
| 1.5 trillion dollars a day compared to the stock | | | | history repeats itself. The point being that human |
| market's turnover of about 10 billion a day. | | | | beings tend to react to situations in the same way |
| Major currencies being traded on the Forex are the | | | | they reacted when they came in contact with a |
| US Dollar, Japanese yen, British pound, Swiss franc | | | | similar situation in the past. All these assumptions are |
| and the Euro. | | | | the bases used to analyse the Forex market and |
| Investors can trade on the Forex from any location, | | | | make decisions. |
| using telephone services, the Internet or secured | | | | To trade online you need an online trading platform |
| access. Traders can also trade for long periods or | | | | that includes automated online brokerage services |
| decide to trade for just one day. | | | | that enables you to buy and sell via the Internet. In |
| Another exciting fact is that the Forex market (unlike | | | | other words, you don't need a physical broker; you |
| other foreign exchange services or the stock | | | | can get an online trading platform that will provide |
| market) does not have a closing time, so you can | | | | you with all the broker services you need to trade |
| trade 24/7 (round the clock). Forex trading includes a | | | | on the Forex. There are a number of reputable |
| measure of risk. That is, you can gain a lot of money | | | | broker websites online that provide this service. |
| or lose money. However, you can operate on lower | | | | One of the most common platforms is the |
| risks by making use of market analysis methods such | | | | MetaTrader 4.The MetaTrader has a user-friendly |
| as discussed below, in addition to "stop loss" and | | | | front-end trading interface. The software provides |
| "take profit" order mechanisms available to traders. | | | | technical analysis; charts and Expert Advisors that |
| Factors that influence the trend of the Forex market | | | | help you build up your own trading strategy. This |
| include transfer of capital between countries, | | | | software is fully compatible with Forex automated |
| economic factors (such as interest rate and inflation | | | | trading robot. Automated trading software are |
| differentials, equity market flows et.c.), activities of | | | | developed to simplify the complication that comes |
| large financial funds based on forecasts, political | | | | with trading on the Forex; most especially to reduce |
| factors, psychological factors and market volatility | | | | risk levels and human errors while trying to analyse |
| (irregularity in the investment market). These factors | | | | the market. Automated trading involves the use of |
| affect the currency exchange rate and the price | | | | Expert Advisors. |
| movements on the Forex. Two basic methods are | | | | Expert Advisor are written programmes compatible |
| used to analyse foreign exchange markets. These | | | | with trading platform software and enables |
| methods are frequently used to inform trading | | | | automated trading to take place without human |
| decisions on the Forex. These are: | | | | intervention. The Advisor can notify you of profitable |
| - Technical analysis | | | | opportunities and also complete deals automatically on |
| - Fundamental analysis | | | | your behalf. It is important to note that you can use |
| Fundamental analysis involves the use of external | | | | a demo account that does not involve real money |
| indicators such as economic factors, political, social | | | | investments to learn how the Forex works. When |
| and psychological factors to predict price movements | | | | you are comfortable with this and you are ready to |
| and trends on the Forex market. | | | | invest, you can go ahead and open a real account. |
| On the other hand, technical analysis uses charts to | | | | In summary, this article examined in layman's terms, |
| identify price trends; these price charts are believed | | | | simple facts that new investors need to understand |
| to have (already) taken into account the effects of | | | | about trading on the Forex. More specifically, the |
| external factors (such as economic, political and social | | | | article touched on the history of the Forex market, |
| factors) on prices. The implication of this is that, | | | | the level of risk involved, factors that influence |
| there is no need to study these external effects | | | | foreign exchange rates and tools used for market |
| separately. Another important believe of technical | | | | analysis. We also delved into online Forex trading and |
| analysts is that the price has a trend and this trend | | | | what it entails. |
| enables you to predict and make profitable decisions. | | | | |