Podcast:

What Is Forex and How Do You Start Trading?

In this video:

00:26 – The basics of Forex trading

00:46 – Coronavirus and the need for additional income

01:11 – Forex is the best market to trade – here’s why

02:10 – Trading currencies in pairs

03:16 – You can also make money when the Currencies fall

05:16 – Allows you to work from home and create a passive income

05:50 – Clients can become full time traders

06:15 – Emails from clients, excellent trading results

07:57 – You need to start with the basics

What is Forex? How do you trade the Forex market? How do you get into it, and what are the benefits? Let's talk about that and more right now.

Hey, traders. it's Andrew Mitchem here, the owner of The Forex Trading Coach with video and podcast number 359.

The basics of Forex trading

I want to take a step back this week and talk about the absolute basics of Forex trading, what it is, how do you get into it, the process you need to go to, seeing if you're the right fit, et cetera.

So if you've been trading for a while, I apologise that this is going to be more of a newbies video and podcast.

Coronavirus and the need for additional income

But the reason I'm making this right now is because with the coronavirus issue going on around the world, and yes, it even affected us here in New Zealand with a lockdown right now, a lot of people are coming to me saying, "Look, I need some form of new income. I've heard about trading. I don't know about it. How do I start? What is it even?" So I wanted to make this video because it's very, very topical.

Forex is the best market to trade – here’s why

So look, to me, trading the Forex market is like no other market, and it's been my only and preferred choice of Forex market now for 16 years. I'll explain to you what it is, and then why I trade it, and then I've got some emails here I'd like to read out that I've received just this week to show what can be achieved.

So going back to the absolute basics, in the Forex market, there are eight main currencies. There are several others, but there are eight main currencies that we look at trading, and they are the US dollar, the Canadian, the Pound, the Euro, the Yen, the Franc, the Australian dollar, and the New Zealand dollar. It doesn't matter where you live in the world, what time zone you're on, what your local currency is. None of that really matters when you come to trade the Forex market. I don't trade just the New Zealand dollar because I live here. If you live in the US, you don't need to trade just the US dollar.

Trading currencies in pairs

So what we're doing is when we say trading a currency, we actually trade currencies in pairs. So it means that we're trading two of those eight together. So when you buy stocks or shares, you're buying just one of something, and you're anticipating it's going to go up in value in most cases. A little bit like when you buy a house, you're buying a house. You're expecting it or hoping it's going to go up in value, especially if it's an investment property. But with currencies, we trade currency pairs, so we trade, let's say for instance, the Euro against the US dollar.

So we always trade it that way round. It's never the US dollar against the Euro. It's just the way that it's written. So we're looking at one currency to strengthen and the other to weaken. So if, for instance, we look at our charts or economically, we look at what's happening in the Euro, and we look at the Euro to strengthen, but at the same time, the US dollar to show weakness, we're looking at buying Euro-US dollar as a currency pair, anticipating it's going to rise in value, so we can make money when it goes up.

You can also make money when the Currencies fall

The beauty of the Forex market and especially right now where things are crashing in most other markets is that we can make money equally as much, and equally as well,