Mario Singh shows how money is made or lost on the world’s largest financial market.

Forex markets trade $US3.5 trillion in a single day, making forex the largest financial market in the world. Additionally, the playing field has been levelled considerably because what used to be the domain of central banks and large commercial banks or hedge funds is now available to the retail investor.

So let’s take a look at a forex trade, how it is executed, and how money is made or lost.

Reading a currency pair
Firstly, forex currencies are always traded in pairs. Examples are:
• USD/JPY (US dollar against the Japanese yen)
• EUR/GBP (Euro against the British pound)
• AUD/CHF (Aussie dollar against the Swiss franc)...

Excerpted from an article originally published in the Mar/Apr 2010 issue of YourTradingEdge magazine. All rights reserved. © Copyright 2010, MarketSource International Pty Ltd.

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