Continued from Part 1 of What To Know About Forex Trading…

Forex Quotes

Another important thing you need to know about Forex trading is how to read Forex quotes. Remember, the Forex quotes are listed in pairs, such as USD/JPY 108.32. In a currency pair, the first currency is the base currency. The number indicates the rate of the second currency (counter currency) against 1 unit of the base currency.  In case of USD/JPY 108.32, 1 USD is equivalent to 108.32 JPY. This simply means that you can buy 108.32 JPY with 1 USD.

There is another form of Forex quoting that consists of a bid and an ask price. An example of this would be USD/CAD 1.2000/1.2009. Here 1.2000 CAD is the Bid (Sell) price and 1.2009 CAD is the Ask (Buy) price. The quote means that you can buy 1 USD with 1.2009 CAD and if you sell 1 USD you will get 1.2000 CAD.

How Trading is Conducted

Once you are confident in your understanding of the basics of what Forex trading is, start researching on how trades are conducted. What happens when you buy a currency pair? What charges will you have to pay, if any? What other factors influence or are influenced by the trade? This will give you a theoretical knowledge of what you are going to try out practically once you set up your account and start trading in reality.

Forex Strategies

In order to be profitable at Forex Trading, you should have a Forex strategy that you follow. It obviously wouldn’t work to stare at the Forex charts, try to determine the trends of the current price then buy a currency that you think is going up in price and hope that it does not reverse. Forex trading is based on speculation, but you have to make sure you speculate as correctly as possible. In order to do this, you should follow a tried and tested Forex strategy. There are long-term as well as short-term strategies. You can choose one based on your comfort level.

Donald Ogilve has been trading the Forex Markets for years. Check out his blog at ForexInitiate.com for tips and insights on Forex Trading. You can sign up for a Free eCourse and get useful Forex Trading Resources to help you trade profitably

Article Source:http://www.articlesbase.com/currency-trading-articles/what-you-need-to-know-about-forex-trading-844071.html

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