The largest and most liquid market in the world trades in the trillions! It offers trading 24 hours a day, 5 days a week. This leading market is Forex.

Experienced dealers have constant opportunities to take advantage of the high levels of volatility that occur on a daily basis. This volatility is the result of many different currencies being traded, which can bring a profit to those who understand the market.

A good businessman will know that he can make a profit in both a rising and falling market, just like the equity market. Unlike the equity market which demands a large amount of margin money to trade, Forex allows the trader to do business with a much lesser margin. Also the trader does not have to pay any commission on the trade. All the features of the equity market like options, futures and CFDs are available in the Forex trade also. Since the minimum trade allowed itself is of a large size, operating with margin becomes essential to the trader.

Buying and Selling on the Forex is always done in pairs. Purchasing one currency and selling another is the way to trade in Forex. The currency you are buying into should increase and the currency you have sold should drop in value for you to maximize your profit.

In case the currency that you have bought, does not rise, you have the option to reverse the other currency to lock your profit. Holding on to your positions without altering or closing the position, it is called an open trade.

Currencies are quoted as follows: The first currency in the pair is the “base”. The second is the “counter” or “quote” currency. The US Dollar is most often considered the base currency, and quote or counter currency is measured by the value of the US dollar. The exceptions to this are the Euro, the British Pound Sterling, and the Australian Dollar.

There is a bid price and an ask price. The price at which the trader is willing to buy the base currency is called the bid price. The ask price is what is offered by the market to sell the base currency and buy your counter currency in exchange.

The Spread is the difference between the bid and ask prices.

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