Forex is actually a shortened version of foreign exchange. This is a market where traders around the world trade one type of currency for others. Investors basically wager on the comparative strength of international currencies, such as the Japanese yen versus the U.S. dollar. If investors properly predict the market, then they can make a lot of money off such trades.

Study the financial news, and stay informed about anything happening in your currency markets. Speculation based on news can cause currencies to rise and fall. You’d be wise to set up text of email alerts for the markets you are trading, so that you can act fast when big news happens.

The forex market is more affected by international economic news events than the stock futrues and options markets. Before starting out in Forex, you will need to understand certain terminology such as interest rates, fiscal and monetary policy,