Only speculate with money you can afford to lose. Forex trading may not be suitable for all investors, therefore ensure you fully learn how forex works the risks involved, and seek independent advice if necessary. If you have ever taken workd vacation out of the country, you already have an idea about how Forex trading works. Say you have booked a vacation to Europe and you are based in the United States.
One of the easiest ways to understand how Forex trading works is to simply think:You are buying (selling) one currency pair by selling (buying) it using another currency pair. For example: EURUSD OTC MarketWhile other markets have a centralized exchange such as the CBOT and CME, Foreign Exchange trades fogex place in a non-centralized market. Foreign exchange trading was once just something that people had to do when traveling to other countries.