The London Session

The London session starts around 8:00 GMT and winds down around 1600 GMT. The currencies that are the most active during these hours are EUR, GBP, and USD.

The US Session
The US session starts around 1300 GMT and winds down around 22:00 GMT. The currencies that are the most active during these hours are AUD, EUR, GBP, JPY, and USD.

The Asian Session
The Asian session is a reasonable quiet session on most days. All pairs are pretty slow moving and it is not a good time to day trade. The only real currency that has noteworthy activity is the JPY and the activity is slow unless a major financial event happens.

What are the major sessions for forex trading?

There are 3 major sessions each day in the forex markets. They are the London session, the US session, and the Asian Session.

What are the most active forex trading hours?

Generally speaking, the most active forex trading hours all around are between the London markets opening around 8:00 GMT and end with the markets in the US closing around 22:00 GMT. The absolute busiest time in the forex markets are during the London to US overlap between 13:00 GMT to 16:00 GMT. These are the hours that are the most liquid or when the most traders are in the markets making trades. If your intention is to do daytrading, these are key hours!

The first trade

The first trade is a nervous and exciting experience. The demo account prepares you for the technical aspects of trading, but when real money is on the line, emotions will come into play. It is important that you keep a level head and do your best to trade with the same methods that you practiced on the demo account. It may prove to be difficult, but if you master your emotions and use sound money management, anything is possible after this step. If your first trade loses money, do not give up, just piece together where you think you went wrong, and try again.

Forex trading is a constant learning experience. Trading mistakes can be expensive. If you learn from those mistakes and do your best to avoid them in the future, you can become a very successful forex trader.

Practice Reading Charts

Before you start making trades you should get familiar with charts and how they work. It is a good idea to get familiar with the different time frames and the different types of charts. The shorter time frames will give you an idea of how the market is moving minute to minute. The longer time frames can show you how the market moves over longer periods and will show the larger trends. Most charting software will offer charts as lines, candlesticks, or bars. Take plenty of time to try out different looks and time frames to find the style that you are comfortable with.

Learn About Leverage

Forex trading is typically carried out using leverage, or trading on margin. Margin is a useful tool, but it can be very dangerous if it isn’t used correctly. Forex brokers typically offer anywhere from 50:1 leverage up to 400:1 leverage. The higher the number, the less money required to put on a large trade. The use of leverage is something that needs to be taken with a lot of care.

Open a Demo Account

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Once you have made your decision on which broker you like the best, it is time to open a demo account. Most brokers will offer at least a 30 day trial of their trading platform giving you a chance to trade on the platform using play money. Using a demo account is a good opportunity to make sure that you feel comfortable using the broker’s trading tools. You would not want to trade real money without being fully comfortable with the trading platform. A demo account will not only help you get a grip on how to use the broker’s trading platform, but also trading the market in real time.

Forex Basics - Forex Trading Basics

efore you can get started with forex trading, there are so many questions to answer. How do I choose a broker? Should I use a demo account? What do I need to know before making my first trade? Let’s answer these questions one at a time, in order of importance.

1. Choose a broker
Making a decision on which broker to use is personal for each trader. Some brokers offer certain options that some traders will thrive on, while other traders will hate the broker for those same options. It is important to review and compare the options of each broker closely and choose the one that makes you feel most comfortable.

How Does Forex Trading Work?

orex trading is typically done through a broker or market maker. As a forex trader you can choose a currency pair that you expect to change in value and place a trade accordingly. For example, if you had purchased 1,000 Euros in January of 2005, it would have cost you around $1,200 USD. Throughout 2005 the Euro’s value vs. the U.S. Dollar’s value increased. At the end of the year 1,000 Euros was worth $1,300 U.S. Dollars. If you had chosen to end your trade at that point, you would have a $100 gain.

Forex Trading

Forex Trading is trading currencies from different countries against each other. Forex is acronym of Foreign Exchange.

For example, in Europe the currency in circulation is called the Euro (EUR) and in the United States the currency in circulation is called the US Dollar (USD). An example of a forex trade is to buy the Euro while simultaneously selling US Dollar. This is called going long on the EUR/USD.

Trading characteristics

There is no unified or centrally cleared market for the majority of FX trades, and there is very little cross-border regulation. Due to the over-the-counter (OTC) nature of currency markets, there are rather a number of interconnected marketplaces, where different currencies instruments are traded. This implies that there is not a single exchange rate but rather a number of different rates (prices), depending on what bank or market maker is trading, and where it is. In practice the rates are often very close, otherwise they could be exploited by arbitrageurs instantaneously. Due to London's dominance in the market, a particular currency's quoted price is usually the London market price. A joint venture of the Chicago Mercantile Exchange and Reuters, called Fxmarketspace opened in 2007 and aspired but failed to the role of a central market clearing mechanism

foreign exchange market (forex, FX, or currency market)

The foreign exchange market (forex, FX, or currency market) is a worldwide decentralized over-the-counter financial market for the trading of currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies

ForexTrading.com's Mission

ForexTrading.com's Mission

ForexTrading.com aims to be a simple entry point to becoming a forex trader and a resource for anyone interested in the trading and analysis of currencies.

On these pages you will find:

• Tools that forex traders commonly use like technical analysis charts, an economic calendar and fx price alerter.
• Forex strategy, analysis and commentary from Saxo Bank.
• A modular forex education program with video and text tutorials.
• Topical forex news highlighted in "What's Hot?"
• A comprehensive financial glossary.
• The opportunity to open a Trial or Live forex trading account with Saxo Bank.

Bid/Ask

All forex quotes are quoted with two prices: the bid and ask. For the most part, the bid is lower than the ask price.
bid is the price at which your broker is willing to buy the base currency in exchange for the quote currency

ask is the price at which your broker will sell the base currency in exchange for the quote currency.

The difference between the bid and the ask price is popularly known as the spread.

EUR/USD

If bid price is 1.34568 and the ask price is 1.34588.

If you want to sell EUR, you click "Sell" and you will sell euros at 1.34568. If you want to buy EUR, you click "Buy" and you will buy euros at 1.34588.

How to Read a Forex Quote

GBP/USD

GBP = Base currency
USD = Quote currency

you will receive 1.51258 U.S. dollars when you sell 1 British pound.

How You Make Money in Forex

In the forex market, you buy or sell currencies.
You purchase 100 euros at the EUR/USD exchange rate of 1.1800 = 100 * 1.18 = 118
After a week you exchange your 100 euros back into U.S. dollar at the exchange rate of 1.2500 = 100 * 1.25 = 125
Your profit is 7 $

Currencies Are Traded in Pairs

Forex trading is buying one currency and selling another through a broker or dealer, and are traded in pairs
Major Currency Pairs

The currency pairs listed below are considered the "majors". These pairs all contain the U.S. dollar (USD) on one side and are the most frequently traded. The majors are the most liquid and widely traded currency pairs in the world.
Pair Countries FX Geek Speak
EUR/USD Euro zone / United States "euro dollar"
USD/JPY United States / Japan "dollar yen"
GBP/USD United Kindom / United States "pound dollar"
USD/CHF United States/ Switzerland "dollar swissy"
USD/CAD United States / Canada "dollar loonie"
AUD/USD Australia / United States "aussie dollar"
NZD/USD New Zealand / United States "kiwi dollar"