Forex Trading Simplified.

According to wikipedia, the forex market is one of the largest financial markets in the world with average daily trade volume of over US$ 3 trillion. With the recent correction and the resulting underlying volatility in the stock markets across the globe, investors have now started looking towards forex trading in order to generate short term returns at a comparitively lower risk, when compared to equity trading. A few friends of mine have made pretty good returns by going short on USD and long on CAD, Euro, GBP, Canadian Dollar, Singapore dollar and the Japanese yen. Sitting in their cushy home offices they do online forex trading through reputed international forex trading houses.

To start trading forex, you will need to open an account with one of the many online forex trading firms. It is important to stick to players who are reputed, backed by big business conglomerates and have been around in the market for quite some time. To get started most firms would require that you deposit just about $50 as initial trading margin. Since the leverage available is huge, profits (or losses) can be huge as well. Before deciding to take a position, do a thorough analysis of the currencies, the macro economy of the country (in whose currencies you wish to trade). A bit of technical analysis will also help in finding the short term trend and predicting the short term price movements. With a bit of effort and in-depth analysis, forex trading is likely to be a low risk, high return game.