FX basics for starting out in 2012

FX Strategy Articles > Fundamental articles

Here at FX Strategy we’re always excited when people new to currency trading join us – there’s nothing better than new friends. While this article is aimed at our new friends who are on a steep learning curve of all things FX; for our more experienced readers we hope that you will still take the opportunity as you read this at the start of a new year to think about your strategy for FX trading in 2012.

To begin with a few facts!

There are around 175 currencies currently in use throughout the world. Of these only a select few are considered to have what is known as “reserve currency” status. Currencies with this status have certain attributes which include liquidity and a broad acceptance and that are widely held by national reserve banks such as the Bank of England. While there can be plenty of debate over definitions the USD and EUR are often considered primary reserve currencies while the GBP, JPY and SFR are considered secondary reserve currencies. FX trading is not limited to reserve currencies though – there are pairings (the term used to describe the exchange rate between two foreign currencies) for many of these 175 currencies available through our recommended platforms.

Currencies trade in foreign exchange (fx for short) markets. These markets provide buyers and sellers with access to buyers and sellers and the respective quoted prices. The rate on exchange at any one moment is referred to as the spot exchange rate. See this earlier article for more details on the trade pricing of FX.

Like most things in life there is a world of knowledge out there to read about – and here at FX Strategy we try to bring you the very best every day. Likewise as life shows us, there is no better way to learn than by giving things a go –learn by doing. All of our recommended trading platforms that you can access via our home page have practice trading accounts which you can use. These are great both for first time FX traders and also for experienced traders who wish to trial new strategies before they put real money at risk.

Another vitally important consideration no matter how experienced you are is to determine the appropriate rate of leverage to employ on any trade. We recommend you read further about this at our recommended trading sites where there are lots of examples of exactly how leverage can be used in employing your FX trading strategies and importantly don’t trade real money until you have a sound understanding of the effects of this leverage.

By Friday Fundamentalist, Published on 16th of January 2012
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