So what is is Currency trading you may ask? Forex could be the exchange you can buy and then sell on currencies. For example, you may buy British pounds (by exchanging these to the dollars you had), then, after pounds / dollar ratio goes up, you sell pounds and purchase dollars again. Following this operation you will have more dollars, then you had at the start. The foreign currency market has higher liquidity, then the currency markets, all the more money is being exchanged. Forex is spread between banks all around the planet and thus it implies Round-the-clock trading. Unlike stocks, Forex trades are finished with high leverage, usually it's 100. It means that by investing $1000 it is possible to control $100,000, and increase potential profits accordingly. Some brokers provide also so named mini-Forex, in which the size of minimum deposit equals $100. Commemorate practical for visitors to enter the forex market easily. The name convention. In Forex, the name of a "symbol" is made up of two parts - one for first currency, and another for the second currency. For example, the symbol usdjpy stands for Cash (usd) to Japanese yen (jpy). As with stocks, you can apply tools in the technical analysis to Forex charts. Trader's indexes might be optimized for Forex "symbols", helping you to find winning strategy. Example Forex transaction Assume you've got a trading account of $25,000 and you're trading with a 1% margin requirement. The existing quote for EUR/USD is 1.3225/28 and you convey a market order to buy 1 lot of 100,000 Euros at 1.3228, expecting the euro to go up from the dollar. Simultaneously you determine a stop-loss order at 1.3178 representing a maximum loss in 2% of your account equity if your trade disagrees you, 50 pips through your order price, along with a limit order at 1.3378, 150 pips above your order price. For this trade, you are risking 50 pips to realize 150 pips, providing you with a risk/reward ratio of a single part risk to a few parts reward. Which means that you simply need to be right one third of times to be profitable.