Thefirst thing to understand is that is a global market created by banks, market makersand brokerage houses where trading in currencies takes place 24 hoursa day and 7 days a week. The market is open to all and has thepotential to give huge profits. It is also the biggest financialmarket in the world where trillions of dollars are traded during thecourse of a day. At the same time forex trading is a growing marketas more traders are turning away from trading in stocks.

Tradingin forex involves trading simultaneously in two currencies, which isknown as a pair. When you are selecting a pair you are trading onecurrency against the other. The first name in the pair (basecurrency) is the currency you are buying and the second name (countercurrency) is the currency you are selling. For example, if you chooseEUR/USD you are buying the Euro against the US Dollar.

Similarly,there is a fixed format of displaying prices. The price is always ofthe counter currency. If the price of EUR/USD pair is shown as 1.3667that means one Euro is trading at 1.3667 dollars.

Mostprices are displayed in 4 decimal points with the exception of theJapanese Yen, whose price is displayed in 2 decimal points. Thereason behind this is that the Japanese Yen is usually more than 100Yen to the dollar. Thus, if the USD/JPY price is expressed as 108.25it means that the Japanese Yen is trading at 108.25 to thedollar.

Theminimum change that can occur in the price of a pair is called pips.It is the fourth decimal point expressed in the pair price. Forexample, if the price of EUR/USD changes from 1.3667 to 1.3668 it issaid to have risen by one pip. This is what makes your profitsrunandriseinstantly in.

Thebid price of a pair is always listed first and the ask price islisted second. Now, what is a bid price and what is an ask price. Thebid price is the price that the market is ready to buyfrom a seller at a given point of time. The ask price is the oppositeof a bid price and is the price at which the market is willing tosell aspecific pair. For example, when the price of EUR/USD is quoted as1.3667//1.3670, the first is the bid price and the second is the askprice. The difference between the two is known as spread, which inthis case is a spread of 3 pips.

Tradingin equity and stocks involves commissions that a client pays to abrokerage house for trading. In the forex market the market makersand brokers earn through the concept of spread. The spread of acurrency pair largely depends upon certain factors. These include butare not limited to market conditions, specific broker or market makerand the currency pair you are trading in. The currencies wheretrading turnover is low have a higher spread while the frequentlytraded currencies have extremely low spreads. Also, somebrokers/market makers are known to charge more than others.

Forextrading is done in ?Lots.? A LOT means the units of the basecurrency that you are trading in. Lots are normally termed asstandard, mini and micro lots. A standard lot comprises of 100,000units, a mini lot of 10,000 units and a micro lot of 1,000 units of acurrency pair. If the EUR/USD paid is quoting at 1.3667/1.3670 andyou are buying a standard lot then that means you are buying 100,000Euros and selling short 136,700 dollars.

TheForexprofit accelerator coursecreated by Mr. BillPoulosranks as a complete training program that explains in detail as tohow to place orders, put stop losses in place and strategiesregarding exiting at the right time so as to manage risks that areinherent in trading in this highly volatile market. Ever since theForexprofit acceleratorwas launched it has been instrumental in helping people make instantprofits withminimal risk.

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