Forex trading is typically uses leverage, or trading on margin achieved. Margin is a useful tool, but it can be very dangerous if it isnâ € ™ t used properly. Forex brokers usually offer between 50:1 to 400:1 leverage leverage. The higher the number, the less money to put on a great trade. The use of leverage is something that should be taken with caution.
Forex trading is usually done through a broker or market maker. As a forex trader you can choose a currency pair that you expect to change the value and place a trade accordingly. For example, if you had purchased 1,000 Euros in January 2005, it would have cost you about 1200 euros. In 2005 the value of Euroa € ™ against the value of the U.S. Dollarâ € ™ increased. At the end of the year 1,000 Euros was worth $ 1,300 U.S. Dollars. If you had chosen to end your trade at that time, you would have a gain of $ 100.
