Trading Forex Pairs: An Academic Guide for Beginners
Forex trading involves the trading of foreign currencies in pairs, in order to take advantage of fluctuations in currency exchange rates. Traders can take advantage of price movements in any direction, going long or short on currency pairs. Forex trading typically leverages margin and leverage in order to magnify returns, and provide traders with access to large amounts of capital with a relatively small investment. By using stop loss orders, traders can control their risk and limit losses on positions. To succeed, forex traders must understand fundamental and technical analysis, money management techniques, and gain experience and confidence in order to successfully execute trades.