What exactly is this thing called Forex?
In this inaugural post of infographicalforex.com, I’m going to go over a few basics for the newbies. If you already trade this market, just click on one of the posts that is more relevant to what you are looking for. But for you new guys, and gals, let’s get started…
So, you heard about this thing called Forex, and do a quick google search. You discover it is a market where currency is traded. Now what?
You look for more information on this market, and still have some unanswered questions. You grab a few digital books, because why make a trip to the bookstore if you don’t have to, and find out that people are making a lot of money trading it, that virtually anyone can trade this market, and now you’re considering entering it.
What they don’t tell you is that there is a steep learning curve to trade this market successfully. Successfully being the key word. Sure, anyone can open an account with a few hundred bucks and start entering orders. You will soon discover that your account is blown and you will swear that forex is a scam. Just mark that blown account down as education costs and continue with your learning. I’ve blown several accounts before I got the hang of it. Luckily, they were small accounts. Now I’m more consistent and actually profitable.
Note: You can trade demo accounts initially to avoid losing actual money. Any broker will give you a demo account. I highly recommend it.
I’ve studied and traded this market for years. I have written books on it to share what I have learned and to help others get to a profitable level. This site explains the concepts that you need to know and follows along with the books, so do get them.
Ok, back to answering the question: What is Forex?
As you can see in the infographic, it is a huge market. Currency from one country is exchanged for currency from another country. Your broker handles all the transactions–you won’t see the actual money. The daily trading volume is now around $5 trillion. The majority of it is from companies doing international business. Then there is the retail side. This is where we are. The retail forex market is about 25% of the entire forex market. It is still in the trillions. Unlike stocks, an order of a few hundred thousand dollars won’t make a dent in it.
In later posts, we’ll go into how to actually trade it and what all the terms mean–because it is a foreign language. Just know that I was where you are now: starting on this forex journey. I will also cover most of the concepts that are in the forex books with explanations to accompany the infographics.
To get the book, with all the infographics: Infographical Forex.