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Forex And Currency Trading FAQ

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Currency Trading Information

Forex And Currency Trading FAQ

What is currency trading?

Each country has its own currency. Currency trading occurs when one country's currency is traded for another country's currency at the prevailing exchange rate.

How does currency trading work?

All currency is traded in LOTS. Each lot has a different amount of currency. For example, a Swiss Franc lot has 125,000 Swiss Francs in it. A trader opens a margin account, enabling him the right to trade it.

What is a margin account?

A margin account is a bond account. Before you start currency trading, you need to place a certain amount into it to guarantee other traders you can pay them if you lose. This account is monitored by your broker and he will not allow you to risk more than you have. When you win/lose it's a place to deposit/withdraw the money.

How is money made on currency trading?

Currency trading is carried out on a point (or pip) system. Traders are trying to capture points. Depending on the currency, each point is worth a different amount. For example, the British Pound is worth about $10 per point that is traded per lot. If you trade 1 lot and capture 40 points, you make $400. 10 lots and 40 points bring $4,000.00, etc.

What is the difference between Futures and Forex currency trading?

Futures currency trading is done in trading pits, where you are trading currencies today, but for future prices. Forex currency trading is trading actual currencies at today's exchange rate with banks.

Am I buying actual currencies when I trade?

No. With your margin account, you are buying the right to trade one "lot" of a currency. Each lot equals a different amount of currency, depending on the currency being traded versus the US dollar.

What is Day Trading?

Day Trading is when a trader buys and sells his lots or stocks that same day. He is in and out of the currency trading market that same day and does not hold his position any longer.

What percent of people really earn money on the Forex currency trading?

10 % make money and 90% lose money on currency trading! Why? Those, who enter the currency trading market driven by greed and fear, lack a sound equity management plan and know very little about the techniques of currency

Why do Professional Traders earn so much money on currency trading?

Those 10% earning money on currency trading receive the money lost by 90%. Most Professional Traders are part of the 10% earning money.

Can I become a successful Professional Trader?

Absolutely! Currency trading is a profession that most anyone can learn. However, it doesn't happen overnight or in a few weeks. You must go through the processes of education and mentoring, just like all professionals did.

Is currency trading a form of gambling?

Currency trading professionals seek price fluctuations and investors seek return on investment. Both take a calculated risk that is minimized by knowledge. Currency trading turns into gambling when you are uneducated, trade emotionally or with a "hot tip".

Can I lose everything on currency trading with the Forex?

No, you can't. The under-educated are likely to lose their margin account, the educated ones have a fair chance of capturing the loser's money.

Why don't we hear more about the Forex?

Pedal to the Metal

The ITC 2009, the Spirit of a Minority

Forex Ranking: 5 years later - Ron Schelling

Making Your Strategy Automatable and Singapore

A Key Odds Enhancer, Often Overlooked

Why Are You Concerned About Your Win/Loss Ratio?

Enduring Draw-Down and the Infinite Time Horizon on Success

Cliff Hanger

One Simple Rule to Control Your Daytrading Losses

Money Never Sleeps

Trading Forex at the New York Open

Learn To Read Industry Code and Better Your Odds

What is really happening versus what we hope is happening

The Secret To Beating The Market

The Fastest Way to Get Your Money Back After a Huge Loss

What Are You Waiting For?

Trading With the Trend

The Smartest Guys on the Podcast ? The Only Guys on the Podcast

Stupid Is as Stupid Does

Where and Why We Trade for a Living

Dodging the Emotional Pitfalls of Forex

Profit Margin

Moving to Break Even

The Difference Between Winning and Losing in FX

Finding the Dominant Psychology of the Market

How to Avoid Whipsaws using the Ichimoku Indicator

A Trend Strength Hint from the Market

How to Know Where Banks are Buying and Selling in the Forex Market

Little Willie and the Price of Gas

Capturing forex trends in seven steps

Ultimate Economic Fighting Championship

The Pleasure and Pain Game

The London Session

Kathy Lien and Double Bollinger Bands

BONUS: An Amazing Revelation About the Euro-Swiss Franc

Demo Trading vs Trading Under Pressure

Profitable Combination of Multiple Averages

What is the Forex Market?

Long Term Levels

How Traders Become Their Own Worst Enemy


Reliable sources indicate that the volume of currency trading on the Forex is about 1.5 trillion. The major part of this money is generated by major investors, banks, financial institutions and governments. Today due to the Internet, more and more people discover the opportunities and get involved in currency trading.

How can I get started with currency trading?

There are growing numbers of international firms offering various approaches to Forex currency trading. In currency trading you need to be very careful and exercise due diligence, so check references. Find a company that doesn't promise the moon. Phenomenal returns are the exception, not the rule! Reputable firms have credentials.
Beware of "Black Box" systems. It is against FTC regulations to offer any guarantee of performance of any system. What one can guarantee is that their currency trading methodology is sound, productive and profitable.
Currency trading decisions should not be made by computer only. A professional trader is a human being who uses his brain and intuition to interpret the computer-generated information. Education and discipline are also essential for developing a good currency trading methodology.

What is good judgment trading?

Good judgment trading is the exact opposite of a Black Box System. It's a complete understanding of the currency trading market and its constantly changing environment. It is a clear currency trading methodology that utilizes high probabilities.

How much money can I make on currency trading?

If you get involved with the right company offering proper education and mentoring in currency trading, you can expect to create a financial performance expectation plan. A lot depends on how much you start out with, how knowledgeable and composed you are.
Never enter the currency trading market without prior paper trading, which is trading pretend money. Once you achieve a track record of successful trades then you may enter the market with your own money.

What do emotions have to do with currency trading?

Where money is involved so are emotions. Many people are quite knowledgeable about currency trading, but can't handle the emotions. Emotions are the biggest obstacle to successful currency trading. You have to rely on logic to succeed.

We strive to provide only quality articles, so if there is a specific topic related to Currency Trading that you would like us to cover, please contact us at any time or use our Forex Trading Blog.

And again, thank you to those contributing daily to our Currency Trading website.