Intro To Forex
Why Do People Trade Forex?
In the last 20 years, The Forex markets have become increasingly popular for a variety of reasons like:
- You have the freedom to trade from anywhere in the world as long as you have wifi
- It moves $5 trillion dollars a day which means there's tons of opportunity
- Unlike with stocks, You can make money if a currency goes up or down
- Although we advise that you start with more, You can start an account with as little as $10
- You're able to use leverage to trade higher volumes, ultimately making more money
The goal in any market is to buy low and sell high and it is the same with Forex
What currencies are most popular?
As the exact details of how popular a certain currency is varies naturally, The major currency pairs which you will hear about and see over and over are (EUR) Europe, (USD) US Dollar, (AUD) Australian Dollar, (JPY) Japan Yen, (CHF) Swiss Franc, and (GBP) British Pound
Below is a chart which shows you the symbol, session, and nicknames for each currency. When trading Forex, You will be using the symbol names to identify which pairs you are trading so remember them!
What Time Should You Trade Forex?
The Foreign Exchange market is broken up into four major markets in which you're able to trade. The two most volatile and lucrative being the London Session (12am PST-10pm PST), and the New York Session (5am PST to 2pm PST), Followed by the Sydney/Aussie Session (2pm PST to 11pm PST), and the Tokyo/Asian Session (4pm PST to 1am PST). Extra note: During summer and winter months from 5am to 9pm the London and New York session overlap.
The London Session
The London session could be referred to as the most popular of the 4 sessions. Over 30% of all market transactions take place during London session.
(EUR) Euro and (GBP) British Pound are both great currencies to trade during London session.
EURUSD and GBPUSD are known to be extremely volatile during the London and NY session overlap
The Australian Session
During the Australian session, (AUD) Aussie and (NZD) New Zealand currencies are both great currencies to trade
AUD/NZD pairs are slower than others due to low volatility. They are great pairs to learn how to trade with
The NY Session
The NY session could be referred to as the most popular of the 4 sessions.
It is the most traded session out of all Forex traders
The (USD) US Dollar is the currency you want to trade during NY session.
EURUSD and USDJPY are known to be the most traded pairs during this time due to volatility
The Tokyo Session
The Tokyo session could be referred to as the 3rd most popular of the 4 sessions. Tokyo is the financial capital of Asia.
(JPY) Japan Yen is the most volatile currency to trade during Tokyo session as well as outside of its session. JPY pairs are known for their volatility so be aware when choosing which pairs to trade.