Forex trading online came into its own in the mid 2000's and has exploded into one of the main active trader environments...

There's a ton of information out there on the Internet available to help you learn Forex, but I rarely see any information for those who are just curious as to how Forex Works.

Simply put, the Forex market is a way to make your money make money by profiting from minor fluctuations in the difference between the value of different currencies, as strange as that sounds...

You can do this from just about anyplace your laptop or smartphone has access, and the potential is there to make life changing money each month from home, a coffee shop, the beach, etc...

It is this money making potential that is so seductive in the terrible economy we find ourselves in, because no matter how bad the business cycle, there will ALWAYS be money that needs to be moved from one economy to the other, and the Forex Market is the engine to make that happen.

In order to begin trading Forex online, first you must deposit money that you are willing to put at risk with a Forex broker. This money becomes your "risk capital", just like the money you might invest in a new business, or for the less serious trader...take to a poker game, or on your Vegas vacation.

Some people think that active trading is akin to buy and hold investing, but nothing could be further from the truth!

When you begin to learn Forex trading, you are beginning a journey in a world of extreme risk taking, and like any other high risk business activity, there's the possibility for extraordinary profits...

Risk management is your number one skill, because the levels of leverage the Forex markets employ allow a foolish trader the possibility to lose all their money on a single bad trade!

While that seems scary, there are many tools available to you that will allow you to manage your risk down to any level you choose.

For instance, when our firm trains a new trader, we don't allow them to start trading real money with more than a $20-$50 risk per trade.

Few understand how much control you have as an individual trader over the actual dollar risk you assume when you put on a new trade in the Forex markets.

One of the great benefits of trading Forex online, is that literally anyone can do it...

It doesn't take tens of thousands of dollars...

In fact I believe for the majority of Forex trading strategies, just a few thousand is more than enough for the average Forex trader. This level of risk capital will let you take trades that are likely to lose several hundreds if they fail, and can produce 500 to 1000 dollars on a winning trade.

The word "Forex" is a shortened version of the two words "foreign exchange".

When you are Forex trading online, you are literally exchanging one of the world currencies for another.

Each currency is influenced by the economic circumstances and governmental policies of the underlying country.

The Eurodollar is constantly fluctuating in value when compared to the United States dollar and this is what a Forex trader tries to protect and exploit.

Once you learn Forex trading and adopt a proven market analysis methodology, you will be able to make a calculated and measured judgment about the strength or weakness of any given currency.

Once the market and your analysis methodology has given you enough information so that you have the confidence needed to make a trade, you'll contact your broker (usually with a click of a button in your broker's Forex trading software on your computer or tablet/smartphone.) And "open a position".

If you are a U.S. based trader, and open a position in the Eurodollar vs. the U.S. dollar, then you're converting your dollars into Eurodollars for the time being.

If the Eurodollar gains in value relative to the U.S. dollar, then when it is time to close out your position, you will sell your Eurodollars for more dollars than you initially paid. The difference between the amount of dollars you paid for the Eurodollars initially, and the price you're able to get at the end of trade is the profit you get to take home for yourself.

You can make money with equal effort no matter if the currency you are analyzing is indicating that it will go up or down, and if you check with your tax advisor there may be some significant tax advantages to profits taken from the Foreign Exchange market when compared to stock gains.

It can be very complicated for a beginner to learn how to make Forex trading easy, but quite honestly if you can tune out all of the "advice" and and just look at a Forex chart through the lens of a tested and proven analysis methodology, the market price actions and reactions will give you all the information you need to put on profitable trades.