financial independence

FOREX is the term commonly used to describe Foreign Exchange Trading a financial market which can provide very high returns if you know what your doing and very high losses if you don't.

FOREX Terminology

Most of the terminology used when trading FOREX is the same as that used in most of the other world financial markets heres some examples and few of the terms are unique to foreign exchange trading.

PIP - Whats a PIP? PIP stands for Price Increment Point and is the smallest unit of trading in FOREX how much a PIP is worth depends the leverage on your FOREX Account and your broker.

FOREX - Whats FOREX? FOREX stands for FOReign EXchange, and is the trading of one currency pair against another.

SPREAD - What is the spread? The point or pip difference between the ask and bid price of a currency pair, spread is how forex brokers make they're money.

ASK - What does ask mean when trading? The ASK price is the price at which you can buy units or PIPS of whatever it is your trading for.

BID - What does bid mean when trading? The BID price how much you can sell for in your chosen market.

BULL - To buy stocks, shares or whatever. You would be a bull if you beleived what ever you were trading was going to increase in value. With share trading nearly all investors are Bulls they buy, FOREX however is differnt most FOREX Investors both buy and sell in fact whenever you buy a curency pair your selling another.

BEAR - To sell you would be a bear if you beleived what ever you were trading was going to fall in value.

Leverage - What does leverage mean when trading? The ability to control large volume of a commodity with a comparatively small amount of capital. Leverage is what enables small investors to participate in markets such as forex, without leverage you would need a lot of risk capital.

Risk Capital - What is risk capital? Money that you can afford to lose.

How can I make Money from FOREX?

You can make money from FOREX by buying or selling one currency pair against another, you can however also lose a lot of Money. Making money from FOREX is like making money money by any other method it takes practice loads and loads of practice, their are many different methods and ways of trading you need to find a style you are comfortable with set up a practice account and study the market see what fundamental announcements have the greatest impact.

The market is currently very volatile so if you really want to make loads of money online in your underpants give it a go, set up a free practice account and sign up for some free FOREX signal services.

Read some eBook's on FOREX have a look here for more investment ideas and information on FOREX