INTRODUCTION                                                       Click Here to read in Vietnamese

Regardless of where you are on the globe, there are always people buying and selling something. When buying or selling, the foremost demands are 'money' in order to complete a transaction.

Today, because of the advance computer technology, people are trading money for international relationship reasons, as many inter-bank at large, or personally profit from buying and selling international money, as individual investors. If you're interested to become individual investor in currency trade, the 'Trading Basics' should give you enough info to get started. If you're a conservative investor, you may want to start to read section 'How To Trade' and try a 'free demo account' to get familiar with the price charts and economic information in realtime. After you've an in-depth knowledge about the currency trade market and its platform, you should consider to 'apply live account' and start trading for profits as many others had done.

The trading of money or currency exchange or foreign money exchange are all terms described an action to buy one kind of currency issued by one country and wait until its value has gone down in compare with certain type of currency issued by the other country, then sell that currency at higher price for profit. The same applied to persons who felt the value of certain type of currency will go up against the other, then taking sell position of that currency and as it became lower, at some levels of profit has been made, then convert into cash to make profit.

As mention above, profits making in currency trading market is depending on a 50/50 chance. Therefore, prior to take position in trading, one may considered look into many factors, such as: understanding of trading basics, know the different in each traded currency pairs, value of currency issued by one nation effected by economic basics, how to read chart analysis based on past trading performance, along with what type of trading tools are comfortably for personal use, together with the method to follow up personal account management and more important, where to get the resources and research about the market that effect your investment.

There are also some degrees of 'luck' involved, one can profit big or can be severe loss due to most investors in currency market does not put up full amount on trading pairs, but often applied the 100:1 leverage concept, which is 1% of the own's money to take position on desired trading pairs, the remaining of 99% are the amount funded by the market makers, usually there's no interest bearing on this borrowed amount. This make currency trading became attractive, you are profit at full 100% of the trade but if the market goes the other way, you could only loss to the max of the remaining margin account of your fund. Many investment institutions have warned all investors who invested in currency exchange are at very high risk of returns on investment. Due to high leverage and low margin can magnify or lead to both substantial profits and losses. Of course, in term of investment at purpose of higher returns from investment, one must have some knowledge about the currency market. Prior to get involve with currency trade, please read 'How to Trade' below.

How To Trade

Today, the daily turnover of the currency trade is about 30 times larger than U.S. stock exchange market, which least to say about 1.9 trillion a day. The currency trade means buying of one currency and selling of another in pair, such as EUR/USD,USD/JPY and so on. There're currencies called 'major' which accounted for more than 85% of worldwide daily transactions; They are: US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar. This is the true 24 hours trading market, from Tokyo, Japan to New York, USA non-stop via other countries.

The daily quote or market price is set to standard as currency on the Left is the base currency which valued is one unit and the Right (after slash) is the currency valued to the Left. Say, EUR/USD 1.285 means, it would take $1.285 USD equal to $1 EUR.

Unlike stock trading, you can take on position as little as 1% of the actual trade value required by the market maker. Say, to trade EUR/USD at 1.280 USD per one EUR, you need to have only $1,280 USD to bid/ask a $100,000 EUR, it called 100:1 leverage or you invested 1% of your own money to bid a 100% trade position. Another advantage, you'll have no debit balance, if the market reacts not your way, you only negated the max of that 1% and not owing anything else as long as you'd closed all positions.

Your cost to trade each pair depending on the pair of your choice, normally is the difference between the buying and selling price of such pair. This is call 'pip' or percentage in point (1/100th). To understand profit or loss on a position, pay attention to the follows: Market price for EUR/USD $1.2550/53 means buy 1 Euro costs $1.2553 USD or sell 1 Euro at $1.2550 USD. (Fee=3pips). Say, you feel USD is weakening, to begin trade, you'll buy a $100,000/lot or $125,530 USD, you need $1,255.30 of your own money to take position.

And, say, you're right! Two hours later, the market price for EUR/USD is 1.2579/82, then you sell at this price. You sold $100,000 Euro for $125,790 USD ($1 Euro = $1.2579 USD) as compared to 1.2553 you'd bought, you profited 26 pips (1.2579 minus 1.2553) or $260 USD (each pip is $10 USD for $100,000 lot), returns on your investment of $1,255.30 USD is $260 USD or 20.70% gain.

Next Subject: Currency Pairs.