It is very difficult to trade in any investment market, which is proved by most novices losing money. However, you will succeed with enough education, practice and experience. So, what is currency trading? Is it suitable for you?

The currency market or foreign exchange (FX) is the world's largest investment market and continues to grow every year. The foreign exchange market may be very large, but now the transaction volume is still mainly from professional traders. However, with the improvement of the currency trading platform, more and more retail traders have found that foreign exchange is suitable for their investment goals.

Foreign exchange market opens 24 hours a day and is only closed from Friday night to Sunday night, but the 24-hour trading period is misleading. There are three trading sessions: the Asian, European, and North American sessions.

Although there are some session overlaps, the main currencies of each market are mostly traded in these market hours. This means that certain currencies will have more transactions in certain sessions. Traders who adhere to the dollar-based currency pairs will find the largest transaction volume during the North American sessions.

All currency transactions are paired. Unlike the stock market where you can buy and sell a single stock, in the forex market, you must buy one currency and sell another. In addition, the pricing of almost all currencies is round to four decimal places.

One point is the minimum transaction increment. One point usually equals to 1/100 of 1%, or the fourth digit after decimal point. Most currencies are priced to four or five decimal places. An exception of this rule is the currency pair of the yen (JPY) as the quotation currency. The price of these currency pairs is usually round to two or three decimal places, and the second decimal represents one point.

Novice traders usually trade currencies with micro lot, because one point in mini lot represents only 10 cents of the price. If the transaction does not produce expected results, it will make losses easier to manage. As for mini lot, one point is equal to $1, and the same point in the standard lot is equal to $10. Some currencies fluctuate as high as 100 points or more during a single transaction period. Micro or mini lot transactions are more friendly for small investors, as they make potential losses of easier to control.

Compared with thousands of stocks in the global stock market, most of the currency transactions are limited to 18 currency pairs. Although there are other currency pairs, the eight most commonly traded currencies are US dollars (USD), Canadian dollar (CAD), euro (EUR), British pound (GBP), Swiss franc (CHF), New Zealand dollar (NZD), Australian dollar (AUD) and Japanese yen (JPY). While no one will say that currency transactions are easy, the transaction choices are much fewer, making it easier to manage transactions and investment portfolio.

Just like anything in the investment market, it is easy to understand forex trading, but it takes a lot of practice to find a successful trading strategy. Most foreign exchange brokers will allow you to open a free virtual account and use virtual currency for transactions until you find a strategy that helps you become a successful foreign exchange trader.

（Writer：Liany）