Action Steps
The best contacts and resources to help you get it done

Use online Forex trading news to help you stay on top of the market

You have to be on top of the foreign exchange trading market if you want to be a successful trader. These websites cover a wide range of topics when it comes to news, such as the country's currency value, tax policy, or if a country is experiencing a recession or economic boom. You can also read commentaries that analysts post on the website. If you need immediate access to the news, you can sign up for alerts so that the stories are delivered to you immediately.

I recommend: MGForex offers currency trading news. You can see if the foreign currency exchange closed up or down. You can also read articles that analysts wrote. DailyFX is another foreign currency trading website you will want to visit. It covers market and economic news.

Use Forex currency trading blogs to learn what other traders are doing

Blogs have become a major force for studying trends or getting news. Computer users rely on blogs to find out what is happening in politics, sports, and even the Forex market. Perhaps one of the reasons why traders rely on Forex trading blogs is that they get to read comments that other traders posted. You can use these comments to come up with trading ideas or improving your existing trading systems.

I recommend: Forex Blog offers currency exchange information, such as the British pound or Chinese Yuan. The articles cover a wide range of topics, including deflation or inflation. You’ll also want to look at EarnForex, which covers technical analysis. It also discusses on how you can better manage your money.

Subscribe to Forex currency exchange newsletters

You can find a wealth of information in FX trading newsletters. One of the features you will like in a newsletter is that you can read about professional Forex traders and their methodology to trading. It's important to understand the psychology behind foreign currency trading. Other topics that you might find interesting are money management or rules of currency trading.

I recommend: Forex Advisor offers a free Forex currency exchange newsletter. Some of the topics it covers include the psychology of trading and how to study charts and execute your trading system. Action Forex also offers a newsletter on currency exchanges. In addition, you can learn what the central banks are doing.

Helpful advice for making the most of this Guide

• •  Subscribe to Forex currency exchange newsletters first. Many offer valuable information on the Forex market as well as trends and general news. This will help you save money in the long run.

Guide to Forex Trading

How to trade the foreign exchange markets for business and profit.

By Greg Brown

Action Steps
The best contacts and resources to help you get it done

Learning about major foreign exchange currencies

Currencies trade in pairs, expressed as two currencies in relation to each other. You are buying one and selling the other simultaneously during forex trading. The U.S. dollar is the most widely traded currency. A huge percentage, 65%, of foreign country reserves are held in dollars, making it extraordinarily stable. The euro is 25% of foreign reserves, making that currency a strong second choice. Also popular are the Australian dollar, Japanese yen, British pound and Hong Kong dollar.

I recommend: It's easy to track foreign currency exchange markets without necessarily trading them first through sites like Oanda, ExchangeRate, and Yahoo! Finance.

Forex trading online via forex trading system sites

The most common way individuals trade currencies is through foreign exchange brokers who operate online. They typically offer access to real-time data, moving price charts and free practice accounts. While legit, they also often promote trading on margin, which can be highly risky for a beginner. Read the fine print and always trade with money you can lose.

I recommend: Among the better-known forex trading system sites online are Forex.com, Forex Club, FXCM, and FXStreet.

Hedging foreign currency exchange and other risk-abatement concepts

Forex trading system scams are legion, and no amount of fine print can protect you if you are bent on losing money. However, it does pay to educate one's self on the proper ways to manage forex trading risk, including how big companies hedge against risk in the foreign exchange market.

I recommend: Take a look at the resources at the U.S. Commodity Futures Trading Commission and the National Futures Association.

Managed forex trading for passive investors

The newest wrinkle in forex trading is managed forex, where investors place money into an account for professional traders to manage on their behalf. It works a little like a mutual fund, but buyer beware -- like in any investment, foreign currency exchange losses can mount quickly if a trader bets big and wrong in your name.

I recommend: Some providers of managed forex trading accounts include Fenix Capital Management, Pinnacle Resource Management, and ForexTradingUSA.

Helpful advice for making the most of this Guide

• •  Absolutely begin with a free practice account. If you're going to lose thousands in a few minutes of forex trading, it might as well be funny money.
• •  Do not ever put your retirement fund at risk. Unlike bank accounts, there is no federal insurance to bail you out if you lose big on the foreign currency exchange markets.
• •  Be a student of global news. Real foreign-exchange traders working on behalf of corporations live for headlines from real-time news services like Bloomberg and Reuters.
• •  Beware companies shilling expensive foreign currency exchange lessons. They often claim astounding result that cannot be proven. If it sounds too good to be true, it probably is.

Action Steps
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Use currency trading software to help you understand how Forex works

Using an online Forex trading software tool should be a requirement in your business. You can use charts to gain a visual perspective regarding how the foreign currency is doing. If it's several currencies you are tracking, you can view multiple charts at the same time. Other features the Forex software offers are up-to-date financial news and applying technical analysis to your charts. If you're on the go, Forex software is flexible in that you can download data to your mobile device.

I recommend: MetaQuotes is a well-known Forex currency trading software tool. More than 100 banks and brokerage firms use this product. Another Forex exchange trading software to consider is PremiereTrade Software. You can get your data in real-time. To help better identify your buy and sell signals, you can set them in different colors.

Attend Forex trading classes

If you want your traders to better understand how Forex works, why not have them take some Forex trading courses? These Forex training courses will cover all phases of the Forex training world. You will become familiar with the Forex trading platforms. Another topic they're likely to cover is showing the difference between equities and Forex trading. The most important thing you will learn in foreign currency trading is developing discipline. This is a crucial trait if you're going to be successful in the foreign currency trading world.

I recommend: Online Trading Academy offers a comprehensive Forex trading course. The instructors will show you what Forex trading is. It offers onsite and home-study programs. You’ll also want to check out TradingMarkets. The course is free and covers topics such as understanding trading psychology and knowing how to protect yourself in various market environments.

Sign up and participate in Forex currency exchange chat rooms

Using chat rooms can be a powerful and knowledgeable tool. You can discover what currency exchanges other traders are trading in at the present time. In addition, you can listen to live presentations by well-known traders. Many of these FX trading chat rooms also offer blogs on foreign currency trading topics.

I recommend: Check out FXStreet. Not only can you look at charts, but you can read articles posted on the website and participate in live sessions by professional traders. LeverageFX is another website that offers a chat room feature. You can use the company’s foreign currency trading software to study charts and apply technical analysis. In addition, you can access economic reports and news.

Helpful advice for making the most of this Guide

• •  Make sure you have a FX trading methodology. Don't be swayed by emotions. If you see that your trade is winning, don't be too quick to add more positions. Likewise, cut your losses if your trade is losing money.

Action Steps
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Currency hedging

Currency hedging is a way that Forex investors attempt to minimize the risk of losses when trading. Hedging does not produce the highest returns, but it is a safer gamble.

I recommend: You can learn more about currency hedging at ForexTheory.

The Majors

The Majors is a term that Forex traders use to describe the most important currencies on the market. The Majors include the U.S. dollar, the Euro, the Japanese yen, the British pound sterling, the Swiss franc, the Canadian dollar, the New Zealand dollar and the Australian dollar.

I recommend: Action Forex goes into detail about each of The Majors.

USD/JPY

When people trade currencies, they always do it in pairs. Pairs are written like USD/JPY, which symbolizes the U.S. dollar in relation to the Japanese yen. The first currency listed is the base currency and the second is the quote currency.

I recommend: ForexFloor.com discusses trading pairs.

U.S. Commodity Futures Trading Commission (CFTC)

The U.S. Commodity Future Trading Commission regulates the futures market and protects consumers from fraud and other illegal practices.

I recommend: Learn more about the CFTC and what it does.

Bid and ask

The bid price of a currency is the amount that someone will 'bid' on it, or offer to pay, while the ask price is the price that a seller wants to get for the currency. The difference in these two prices is called the bid-ask spread.

I recommend: Check out FX Info for examples of a bid price, ask price and the bid-ask spread.

Pip

A pip is the smallest difference that there can be between currency pairs. This varies between the two currencies, but whether it is .01 or .001, it is always a decimal.

I recommend: To learn more about pips and how to calculate them, visit Forex-Training.com.