Forex Trading is placing bids on currency trading platforms when a currency rises or falls against another. Forex traders can profit or lose from such movements. Forex trading has become more accessible due to internet access. Trading in forex can be done on weekdays from 22:00 GMT on Sunday until 22:00 GMT on Friday.

Opening an online account

A trader will be required to register on a forex trading website and download a trading account. A trader will have the option of opening a live or demo account. With a demo account, a trader can choose to test their forex trading skills and strategies.

Gains and losses in a demo account might reflect the gains or losses a trader will incur on a live account. Once a trader is satisfied with their skills on the demo account, they can open a live account and deposit funds. Minimum deposits can be as low as $1. One will then choose the currency pair they want to trade in.

Analyzing the market

Before a trader places a bid, they will need to have a strategy. There are different trading strategies such as trading in news event where a trader can predict the outcome of a news event or wait for the results of a news event. Such news events are U.S federal interest rate decision, not-farm payroll figures, GDP figures, inflation figures among other press releases from government agencies such as the U.S federal reserve.

Another strategy is using a trading software which is also referred to as a forex robot. There are many trading software on sale online. Only few trading software give profitable trades. Another strategy is 'copy trading.' Some websites have trading platforms that allow low skilled traders to copy the trades of traders who are highly skilled and have made profits in forex trading in the past.

Fundamental Analysis will also allow traders to place bids based on fundamentals such as recent and past forex price movements.

Placing a bid

Bids can be placed depending on a traders trading strategy. Bids in news trading last shorter because market volatility after a news release does not last long. A robot software, on the other hand, is programmed to decide on how long a trade should last.

Trading through fundamental analysis tend to last longer.

Understanding the risks

There are risks associated with forex trading; traders can lose some or all of their initial deposits. Traders can also fall victim to fraudsters who will either steal their deposits or refuse to process their withdrawals. Other risks are that traders can make huge losses due to news releases or changes in government actions such as policy changes. The British pound for example devalued last year as a result of Brexit, some forex traders gained while some lost as a result of the price movements the British pound experienced.