Hello all welcome to the second post on my new blog. I just wanted to write a quick post about a topic that I will probably be discussing a great deal on my blog, which is Forex Trading. For those of you that do not know what forex means, it is short for foreign exchange trading. Investors or traders are able to trade the rise and fall of currency pairs.
When I say “currency pairs” what I mean is there will be two different currency pairs that are matched up and as one currency in the pair strengthens or weakens compared to the other currency there will be a rise or fall in the currency pair price. For example a common currency pair is the EUR/USD, which is the Euro versus the U.S. dollar. If the Euro gains strength as compared to the U.S. dollar the value of the EUR/USD will rise. Put another way it would cost less in Euros to purchase a U.S. dollar as the value of the Euro increases as compared to the U.S. dollar. As the Eur/USD declines in value it means that the Euro is losing value as compared to the U.S. dollar and it would cost more in Euros to purchase U.S. dollars. It is the rise and fall in the currency pair prices that are traded by forex traders. There are minute changes in the value of the currency pair by the second.
There are many different types of forex traders. Forex example “scalpers” trade from the very short time frames such as the 1 minute chart and are typically only in a trade anywhere from a few seconds to ten minutes. Whereas long term traders or swing traders usually trade from the daily or weekly charts and may be in a trade anywhere from a day to many weeks.
I hope this has been an informative introduction to forex trading and if you liked the post please share or “like” this post on one of the social media links below.