Forex Trading is considered to be thrilling and fascinating by people who love to spend their time in these markets. Forex trading, however is not for everyone, It has its own share of risks. Some people like to trade Forex as a hobby while some others have made it their profession. Forex is one of the biggest markets in the world. Every day thousands of people trade here in anticipation of huge profits. One should be patient and know the tricks of the trade while indulging themselves in Forex trading.
A Forex guide is essential for beginners as the market is very risky and if one enters it without any knowledge of Forex trading, he may incur huge losses.
The first step for beginners is to understand the basic Forex terminology. The type of currency that one wishes to sell or spend is called base currency. On the other hand, the currency which one is planning to purchase is called quote currency. In Forex trading, one keeps on selling and buying currency pairs in the hope of getting profits. Exchange rate refers to the rate at which one has to sell the quote currency in order to purchase base currency. Long position in Forex trading means that you want to buy the base currency and sell the quote currency. Short position means the opposite, that is, one has to buy quote currency and sell base currency. Bid price is the price at which a broker is willing to buy base currency is exchange for quote currency. Bid is the best price at which one is willing to sell his or her quote currency in the market. Ask price or offer price refers to the price at which a broker is planning to sell base currency in order to exchange it with quote currency. Ask price is the best price at which, one is willing to buy from the market.