by Saeed Darabi

Created on: March 22, 2010   Last Updated: March 23, 2010

What is Forex and how do you make money with Forex? It's a question that many people want to know the answer to, and no wonder why! There are potential in Forex currency trading for making big sums of money in a matter of minuets.

For a beginner, Forex may seem like an impossible thing to understand. But, the truth is, Forex is actually quite easy to understand. When it comes to Forex, i am no expert by any means. I just know a little about Forex and how it works, mostly from research and readings i have done in the past couple of years. Since Forex is one of the least understood ways of making money online, and since i know there are a lot of beginners who want to learn Forex without having to pay somebody to teach them, or pay thousands of dollars to take a "Forex course", i have decided to write a series of 7 articles about Forex, to help those who are interested in Forex trading, learn the basics of it.

 

Forex is made up of two words, Foreign and Exchange. It refers to exchanging foreign currencies, for a profit of course! How is that possible? Well, because of the economical and political happenings, rates of currencies change. It gives you an opportunity to make a profit by trading currencies based on their rates. That's how Forex traders make money. of course, this means that it is risky, and there is possibility that you may lose your money.


Forex Traders Can Trade With Any Country
In many ways, Forex trading is a lot like stock exchange trading, but there are some game changing differences as well. One difference from stock exchange trading is that unlike stock traders, Forex traders are not limited to dealing in their own country. A Forex trader can trade any two currencies, at any time, any where. Which makes Forex market, an international market.


Forex Market Is Open 24 Hours A Day
That brings us to another major difference between stock exchange trading and foreign currency trading. As you know, there are different time zones in different parts of world, and since Forex market is an international market, to be possible for anyone from anywhere to trade at any time, forex market has to be open 24 hours a day.


In Forex Currencies Are Represented With 3 Letters
Just like stock exchange market that each company is represented with certain letters, In Forex, currencies are represented that way also. But, unlike stock exchange market that a company can be represented by any number of letters, in Forex market, currencies are represented by only 3 letters:

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