FOREX TRADING- The Basics Explained in Simple Terms ( PDFDrive.com )

The low cost of trading is also important. Most trading is conducted electronically
over the internet on your nominated broker's online account. The cost is minimal
for each trade as there is normally no commission involved, however you do have
to cover the spread. This will be explained shortly, but it can be very cheap to trade
considering some pairs now have less than one pip spread.
Further to the low cost, you can open an account with a broker for a very small
amount, and in some cases, just a couple of hundred dollars. Granted you are not
going to make millions from this, but it is a start. I will cover brokers later.
Some Further Advantages of Forex Trading
So we need somewhere to trade and as stated earlier, this is all done online via the
internet. The good thing about this is that most brokers offer unlimited
demonstration platforms where you can practice trading for as long as you like
without risking any of your own money. This is brilliant if you want to try out
different trading methods and ideas. Commonly referred to as 'demo trading,' there
is no reason that you can't have both a 'live' and 'demo' account with the same
Broker. Just ensure you don't get them confused.
Demo trading is quite a useful tool where you can try out different things etc, but
please be warned, trading on a 'demo' account is nothing like trading on a 'live'
account as there is zero risk with a 'demo' account and therefore your emotions do
not come into play at all. It is like walking across a plank of wood 6 inches above
the ground, compared to walking across the exact same plank of wood ten stories up
in the air. I'm sure your emotions would be different, and the same goes for trading.
When there is real money on the line, you will think and act different! Trust me on
this.
And to take this one step further, Forex data is live and it is free. Unlike a lot of
stock data where you have to pay a monthly data subscription fee or stuck with 15
minute delayed data, your Forex data is all freely provided to you by your chosen
broker's trading platform. I’ll have more on brokers and their platforms later.
When is the Forex Market Open?
Here I will discuss the trading times and as you will see, there is ample time to trade
Forex. As stated earlier, it is a market that is open longer than it is closed. As most
people would be aware if you were trading stocks then you would trade these
through an exchange, whether it was the New York Stock Exchange or the
Australian Stock Exchange. Forex trading does not have any central exchange as
such. All trading is done through the banks or market makers, which are basically