Three of the important concepts in Forex Trading that you must understand are what "Pips" are, What "Volume" is and what you do when "Buying" and "Selling Short". They may look more like four concepts but Buying and Selling are like the two faces on the same coin so we can consider them as a single concept.

Lets first introduce what Pips are. Maybe you have heard or read already how many pips a day you can make using some trading system. In short, currency pairs prices will go out to 4 significant digits. For example; if one currency pair is trading for 1.3451 then an increase to 1.3452 would be a "one-pip" increase in the price of this particular currency. This is an increase of one hundredth of a percent of the value of the currency pai

The Forex market is a great place for individual investors, large and small, to engage in thrilling, fast-paced and potentially profitable trades. But you can't participate in forex currency trading if you don't first have a forex brokerage account. While most stock-market brokerages allow you to also trade bonds, mutual funds, and other financial instruments, forex brokerage accounts are typically standalone entities. Here is what you need to know about opening a forex brokerage account.
Leverage

One of the major benefits of trading currencies on the forex is the tremendous amount of leverage even small-time traders are allowed. Typical leverage is 100:1, meaning for every $1 in your forex brokerage account, you can control up to $100 in currencies. A thousand dollars would thus allow you to control $100,000 worth of currency, so if the currency went up by 1% -- $1,000 -- you would actually double your money! But if the currency went down by just 1%, you would lose all $1,000 of your investment. What would happen if the currency went down by 2%? Well, theoretically, you would lose $1,000 above and beyond your initial investment, but in reality, a forex brokerage firm will usually step in and prevent this kind of loss.

Your main decision is what level of leverage to apply for. Leverage is given based on credit-worthiness, so if your credit report is pretty poor, you might want to pursue just 50:1 leverage -- which still gives you a lot of room to profit but limits your risk. Alternatively, if you have true nerves of steel and a real knack for forex trading, you may be able to apply for as great as 250:1 leverage!
Spreads

The good news is that there are no commissions charged on Forex trades. The bad news is that, like stocks, forex currency pairs do have a bid/ask spread -- meaning a market maker will pay less for a currency than he is willing to sell it for. These spreads are extremely small, usually less than 0.05 cents, but the wider the spread, the more costly trading will be over the long run.

Not every forex brokerage has the same spreads, so it is important to review the typical distance between the bid and ask prices before selecting a forex broker.

Anthony P Mullen is a regular contributor to www.forexmarketfocus.com

Last week the Euro hit an all time high against the US dollar after speculation intensified that the FOMC (US equivalent of the bank of England) will cut rates to ease the credit crunch which has plagued the equity markets and lending institution world wide. The USD also lost against other currencies, slipping against both the pound and the yen, but the main action was with the Euro says Betonmarkets.com's Michael Wright.

There are implications from this; the Euro's strength threatens to make European exports more expensive, and therefore less competitive. However, the impact so far hasn't been too dramatic due to the currency's movement this year being gradual rather than abrupt.

The weakening dollar conversely makes U.S. exports more competitive, which is good news for American manufacturers but means rising prices for imports to the U.S. The dollar's decline also diminishes the spending power of American tourists in Europe, while attracting to the U.S. visitors from Europe seeking cheaper accommodation and shopping.

The dollar, which has hovered within a few cents of its record low over recent weeks, had come under new pressure since the U.S. Labour Department issued unexpectedly poor August jobs data. That report strengthened speculation that the Fed will cut interest rates at its September 18th meeting by as much as half a percentage point. A cut from the current rate, 5.25 percent, would be the first reduction in four years.

Lower interest rates, used to jump-start the economy, can weaken a currency by giving investors lower returns on investments denominated in the currency. The European Central Bank last week put its own two-year run of gradual interest rate rises on hold but left many economists still expecting a quarter-point increase from the current 4 percent before the end of the year.

With the countries seemingly going in opposite directions with their interest rates, and economies, it means that there could be further gains for the European currency. The key to this will be in the wording from the FOMC, if the statement is dovish it could open up the possibility of an appreciation in the euro by as much as 3 cents.

With Betonmarkets.com you can take advantage of this potential situation by buying a "no touch" trade on the Euro/ USD. This compensates you if the currency doesn't touch a certain predetermined level for the duration of the trade. A no touch option with a 25 day duration and 400 "pips" or 0.04 Euros below the current spot price, returns 10% ROI. This means you win if the Euro continues to rise against the dollar or doesn't dip too severely.

http://www.betonmarkets.com