About This Book
This book is intended to introduce the novice investor to the exciting, complex, and potentially profitable realm of trading world currencies on the FOReign EXchange markets (FOREX). It also serves as a reference guide for stock and futures traders who wish to explore new trading opportunities. My primary focus is on the rapidly expanding and evolving online trading marketplace for spot currencies, generally referred to as retail FOREX.
Currency trading has a wide appeal in today’s global economic and investment climate. Currencies allow the investor to participate in the financial and economic fortunes and misfortunes of different countries and different regions. As I write these words, there is a seesaw battle between the debt crisis in the European Union and the one in the United States. As news and sentiment ebb and flow, so does the euro/U.S. dollar (EURUSD) currency pair. While the risks are substantial, the rewards are also potentially enormous. There is opportunity every trading session in FOREX. A market does not need to be in a sustained trend to have profit potential. It requires only movement and volatility.
Unlike equities and stocks, a currency trade is a spread between one currency and another currency. You are simultaneously buying one and selling the other. While trends in currencies can be very long, they ultimately trade in very wide bands as interest flows back and forth between the two members of the pair. Barring a country’s collapse, ...