Forex Trading - Where is Your Money?

by : John Quinones

Did You Know That The Forex Trading Market Determines The Value Of Your Money?

I didn't until I began reading some Forex trading website's that I came across while I was doing some surfing. At first it was just curiosity that lead me to read so introductory articles. Soon I began to realize that I was reading about the single largest currency market in the world and that what happened in this market had a direct effect on my personal finances and the welfare of my family.

The foreign exchange marketplace is where the actual currencies of individual countries are traded around the world, 24 hours a day, 5 days a week. The market has many nicknames, FOREX, FX market, currency trading etc., but what it really represents is the single most important marketplace on the planet. I call it the most important marketplace because what happens in the FX market has a direct effect on the value of the money in your pocket. Sense just about everything you do, need and desire is affected by the value of the money you have at any particular moment, learning what the Forex market is and how it affects your life is something everybody should be interested in doing.

The fundamental law that guides international currency values is the level of confidence that the Forex market as a whole has in one particular countries currency, relative to another countries currency. This confidence level is made up of multiple factors, including measurable economic data and non-measurable market psychological factors, but the underlying principle of it all is that the more stable the countries government, economy and history are, the more value will be placed on that countries currency. Once you begin to understand this principle, it will slowly dawn on you why certain pieces of information always make it onto the daily newscast! Terms like "lead economic indicators", "lower federal interest rates" and "consumer confidence index reports" will start to have real meaning to you as you start to realize the profound effect these things have on your daily life.

All of these economic and political reports serve as indicators of the overall health of the America on the world market and thus have a profound effect on the value of the dollar. If these indicators offer bad predictions concerning the state of the US economy, the value of the dollar will decrease on the Forex market and the costs for goods and services will increase for Americans. If the indicators are good, the dollar's value increases and we can buy more goods and services. Finally, I had made the connection between the financial markets on Wall Street and the amount of food on my table and my view of the world was changed for good.

Once I realized how much power the Forex trading market had over my life I committed myself to learning as much about it as I could. It has not been easy. Apparently, access to the FX market has been restricted historically and not much information used to be available on the subject. As with everything else, the internet has changed all of that and now just about anybody with a computer and internet connection can gain access to this important market. It did not take long to discover that the FOREX is a huge beast and it was going to take time, effort and a large learning curve to get even a basic understanding of what was actually happening. I decided to write down what I was learning in the form of articles for two reasons: