Online currency trading is a relatively new method of trading. Until fairly recently, currencies were only traded by major institutions and banks. But, with the advent of the internet and the opening up of the Forex market to the retail trader (that's us, the smaller players), almost anyone with a hundred dollars and an internet connection can now trade Forex.
But the knife cuts both ways. While this is a great opportunity for the trader who wants to participate in the currency market, it also invites the naive belief that currency trading is easy money. There are plenty of marketers out there who are ready and willing to promise you that online currency trading is easy. They are all too willing to sell you robotic trading systems and expensive programs that virtually "guarantee" your success. But the reality is that learning to trade Forex takes time, as does anything else. And there is no shortcut for the study required and the inevitable education that occurs "by the seat of your pants".
Now that I've issued a general warning, I'll also state that currency trading is a great place to get started for the novice trader who wants to "try their hand" at investing. It is also a great opportunity for those who want to diversify from their stock and option trading. While most traders favor one market or another, some stock traders have simply been scared away from Forex trading because it seems so mysterious.
The fact is, however, that currency charts are very similar to stock charts. Here's an example of a daily chart of the EUR/USD:
If you're accustomed to trading stocks, then you might notice that the above chart looks like any other chart. Technical indicators can be added to these charts to help the Forex trader with their trade decisions, just as we add technical indicators to stock charts.
So, trading Forex online is easy to do. Brokers allow you to establish accounts with small deposits (some as low as $100). Chart services are available for free. Even though you may want more expensive and dynamic chart capabilities later on, there is no need to start spending a lot of money just to get started. Forex brokers' fees are generally included as part of each transaction or they are part of the spread (the difference between the bid and the asking prices). And, since Forex trading is open for 24 hours a day, 5 days straight, most traders can find time throughout the day to trade the market around their current jobs and other responsibilities.
This article has attempted to tell you a few of the benefits and pitfalls of online trading. If you'd like to learn more about the Forex market, then here's a free series of videos to get you started: Click Here .
Basic online education about Forex is also available by clicking here and clicking on the school tab.