Online forex trading explained written by: Beatonmiller
 
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With continued strengthening of major world economies like the US, the Forex market is witnessing one of the most volatile seasons as some currencies appreciate while others depreciate. If you aspire to make a gain from this situation, then online Forex trading is the best investment to make. Like all other investments, it is important to get a good understanding of what online Forex trading means, how it is done, the risks involved, opportunities to make money and all other pertinent information. Here is an head start
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Online Forex trading explained
Forex trading basically involves the purchase of one currency and selling of another at the same time. Currently the US dollar exchanges at 120.97 to Japanese yen or in the language of traders USD/JPY 120.97. In simple language, you need 120 yen to buy one dollar. This exchange rate is not static; it changes every minute depending on many factors like information released by the US government relating to overall US economy outlook. As a Forex trader, you make money when the foreign exchange change occurs by simply buying when the exchange rate is low and selling at its peak. The biggest challenge that you will face as a trader is knowing when to buy and when to sell and this post will shed some light.

Forex market
Online Forex market is the largest financial market globally with estimated trading volume of 3.4 trillion dollars. This implies that the market is on operation 24 hours in a day giving you more opportunities to make money. The Asian session sets of the Forex market, followed by the London session and finally the US session. An important element to understand about these markets is that the local currency is the most active during a particular session. For instance, during the Asian session also known as Tokyo session, it is expected that the government of Japan will release information about its economy and depending on the nature of information; the Yen will appreciate or depreciate against major currencies. The important thing to understand about the markets is when these markets open and when they close basing on your local time.

Trading platforms
Forex trading online is conducted on a trading platform offered by many companies. All that is needed is to sign up for an account, deposit the money and start trading. The platform has MT4 or Meta trader where as a trader you can execute buy or sell trades. Further, the MT4 contains trading indicators which predict the movement of the currency pair to enable you to make informed choices. A trading platform must give an historical calendar complete with analysis of all major information released and how the information is likely to affect the market as shown in the diagram below. Choice of a platform is one of the most important decisions in Forex trading online and it is covered in details in one of the articles in this series.



Succeeding in Forex trading online
Forex trading is a significantly high risk investment and there is a risk of loss of all the invested money .These tips can help you lower the risk of losing your money:

-Always start with the demo account before opening a real trading account. A demo account gives you the opportunity to learn, practice and make mistakes without losing your money since you use virtual money to trade.
-Trade with take profit TP and stop loss ST.
-Start with a small amount preferably 500 dollars or below. If you make profits consistently for about 2 months, you can add funds to your account.
-Trade without emotions. Emotions like anxiety, excitement, panic, stress will lead you to make poor trading moves and end up losing money.
-Learn to accommodate small losses, every once in a while you will make loses, and you need to accept and move one rather that try to execute other trades to make up for the loss.

Forex online trading is a profitable venture. Follow the tips outlined in this article and start earning.

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