crash course on Forex trading 101.

Step 1. Find a forex-trading house you can trust.
There are a number of currency trading houses you can use. We recommend F.X.C.M. which has its global headquarters in New York. It is a registered Futures Commission Merchant or F.C.M. that specialises solely in spot Forex trading. With over a million trades executed each month via their Trading Station, F.X.C.M. is the unrivalled leader in the online currency market.

Step 2. Take the plunge!
Open your first forex account and do your research
Opening an account is as easy as going to the F.X.C.M. website on www.fxcm.com and downloading the registration documents. You`ll need to fax these back to the F.X.C.M. head office in New York after which a dealer from the New York trading desk will contact you. After transferring cash overseas to the F.X.C.M. account you will be able to begin trading online. The trading platform can be downloaded from the website onto your desktop and with your login and password you can then trade. If you have any hassles there is a toll-free number to contact around the clock.
Then you need to decide what currency pair you want to trade and when you should buy or sell it. You only trade the four major currencies against the US dollar, namely: the Japanese yen, British pound, the euro and the Swiss franc. This is because they are the most active in terms of trading volume and they are also the cheapest to trade.
The US dollar alone accounts for 80-90% of all currency transactions. Trading currency is not like buying a share, it`s more like putting down a deposit and taking a view on whether a certain currency will weaken or strengthen against another. This deposit is referred to as a margin. If you are wrong, the loss will be taken from your deposit. If your prediction is correct your margin will be returned to you along with your profit from the trade. Due to certain built-in safety mechanisms, you can`t lose more than your margin. If the position goes completely wrong, your currency broker will close the position automatically preventing further losses.

Step 3. You wouldn`t buy a car without test-driving it first, so don`t go into forex trading blind either!
Changes in interest rates around the world and other economic data cause exchange rates to fluctuate violently, however the best way to trade currencies is technically. By this I mean making use of technical charts and various leading and lagging indicators to time your entry into the market. You will have to brush up on the interpretation of the various technical indicators, which you can do online, or with the help of any number of technical analysis books, available in your local bookstore. To be able to test your technical trading strategy you can open a mini-demo account with F.X.C.M. and trade online with fictitious money. The technical charts and indicators are available online via the trading station (www.fxcm.com) and are free of charge.


Step 4. Take a deep breath and make that trade!
A typical trade will be as follows: A quote on the euro/US dollar might be as follows:
Sell: 1.5560. Buy: 1.5564
This means that if you believe that the euro will strengthen against the US dollar you can buy the euro. In taking this view you are expecting the US dollar to weaken against the euro. You can buy one euro lot at 1.5564 and assuming you are correct and the euro does strengthen against the US dollar the quote may look as follows: Sell: 1.5643. Buy: 1.5647.

Step 5. Keep both eyes on your trade ? at all times!
Currency trading is a short-term exercise. When you execute a trade it is a position that is held normally for a few days, often sometimes even for a few hours. The reason for this is that when a position is taken one is geared.