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Trading forex news is one of the most popular ways to earn money online. It can be used to earn additional income. It is important to have some knowledge about trading before jumping in. Trading forex is buying and trading different world currencies. Forex deals occur when an individual sells one currency while simultaneously buying another. Trading always takes place in pairs such as EUR/USD, USD/JPY and CHF/USD. Only when you purchase at a lower price and then sell it for a high price will you make money.

The basics of Forex trading

It is the biggest trading market on the planet. This market has an average daily turnover of nearly $2 trillion. That is 30 times greater than the volume of equity trading within the United States. This is an extremely unique system, as trading occurs between two counterparts through electronic or telephone networks. The forex market is not centralized, and it operates around the clock. Trading begins in Sydney when the first financial exchange centers open their doors and then continues around the globe to Tokyo and London before ending up at New York.

Learn how to read the forex quotes first before trading. They are listed always in pairs. USD/JPY is 108.3. It is the first currency listed that has the constant unit value. The second currency on the list is called "counter". The example would lead you to believe that a single United States Dollar is the equivalent of 108.3 Japanese Yaen. The quote always shows you how much one currency is worth in comparison to another.

A two-sided quotation is one type. EUR/USD 1.3452/1.3444, which is composed of a bid and an ask, can be seen occasionally. The 'ask price' is where you buy base currency, and the corresponding 'bid price' is when you sell base currency. The spread is the amount of difference between the "bid" and "ask". For example, you could buy 1 Euro for $1.3440 or $1.3452. Currency brokers can make money from these differences, and this is why they offer services to individuals without requiring commission fees.