Foreign currency trading is done in lots of $100,000. While this sounds daunting, the foreign currency exchange system allows high margin rates. Of course, margin increases your exposure to loss, so you really have to know what you are doing.
One recommended way to get around this is to trade a mini-Forex account and to use a Forex trading software package.Â
This option allows you to trade in $10,000 lots, and with the high margin allowances in the Forex, you could make trades with as little as $100.
As you gain exposure to the Forex trading business, you will notice the frequent use of the word "pip."
The Forex market trades currency prices in pips. A pip means "percentage in point." In the Forex world this pertains to the fourth decimal point, which is equal to 1/100th of 1%.
One cautionary note about small trade sizes however, is that you will need bigger pip differentials to make a decent profit.
Currencies fluctuate for a variety of reasons, and predicting these fluctuations can be accomplished with technical analysis, and observation of current events, politics, and the economy of the country whose currency you are interested in.
Many traders choose to focus their efforts on one foreign currency and look for buy and sell signals by trading the dips and swells of that currency.
Forex trading systems
