Currency exchange rates fluctuate every day, although usually not in significant swings, unless there are dire external circumstances, such as the collapse of a national banking system, currency devaluation or bankruptcy.  There will however be long term trends upward and downward that represent the strength of the economies of two countries in relation to each other.  For up to date information on currency exchange rates, one should consult a bank and the price in London, the center of currency trading, is considered the market standard.

Different banking institutions and exchange bureaus will have different rates, usually reflecting the profit they will make from the transaction.  There are also different rates for buying and selling currency, reflecting current market demand.  Some currency exchange places will keep accurate current exchange rates but charge a percentage commission on the transaction.

When abroad, you will often find that banks and credit cards will have the best currency exchange rates and currency exchange at the airport of heavily tourist areas will have exorbitant commissions and fees.  It is best to change some currency at a local bank before leaving for the foreign country, although that bank may have to request the foreign currency in advance from another branch.  

Currency exchange rates change at all times of the day as the Forex market operates continuously through the week.  Before making a major foreign transaction, check the currency exchange rates and trends to determine if you will be paying more or less as the currency exchange rate changes with market demand.

There exist a number of websites that will help you learn Forex trading and we will not make a recommendation on the best websites to use.  Rather there are some important things to look for when picking a service to help you learn Forex trading.

Many programs that will teach you Forex trading will resemble a sales pitch and attempt to convince you to buy a product or service.  Usually this service to learn Forex trading will promise to “reveal secrets” that will make your investments more profitable, often claiming that the majority of other traders are constantly losing money.  This is usually a scare tactic to have you part with your money.  The trust is, only shrewd investing and diligence will ensure Forex profits and there is no secret or hidden “safe havens” that is not readily apparent to the entire Forex market.  Remember that the Forex market is only comprised of the currencies of most of the world’s nations, rather than the stock market where these tips would be more relevant.

Also, be wary of Forex learning programs that promise quick and high profits.  Forex trading is liquid, but also exceptionally risky, with small gains and losses potentially inflicting massive profits and financial loss, do not expect to strike it rich overnight.  Good programs that help you lean Forex trading will preach the importance of patience and diligence in position Forex trading and quick thinking in Forex day trading.

Many “work at home” enterprises and scams will promise these large profits when working with Forex trading.  Be suspicious of claims that seem to promote huge profits and the promise that you will be able to “quit your job.”  If everyone could learn Forex trading and quit their job, they would have done so already as Forex trading, despite its initial complexity, is not difficult to master.

You should almost certainly try a free simulator first.  You will start with imaginary capital and make investments as you would under normal circumstances.  You will be able to see if you can indeed make money in Forex trading and if such investing suits you.  Through these simulators, you will familiarize yourself with the common terminology used in Forex trading as there is an entire lingo devoted to investing and news about Forex trading.

You should become familiar with automatic trading programs that will make trades on your behalf, 24 hours a day.  Consumer reviews will be readily available for most trading programs, so you will be able to determine if such a purchase of either the program or service that comes with the program is worthwhile and a valuable tool to Forex traders.  Look for critical reviews and if you have learned your Forex lingo, you will be able to discern genuine reviews about the product to false reviews that shill for the product and are meant to scam those that are new to learning Forex trading.

Trading on the Foreign Exchange Market, also known as Forex Currency Trading is a popular investing option for some.  Forex currency trading is popular due to the liquid nature of the assets, relatively low barriers to entry when compared to other investments and the continuous operation of the markets.  This does not mean however that there are lower risks in Forex trading and indeed a potential Forex investor can lose all of their initial investment if they are not careful.  The US Dollar is the most traded foreign currency, followed by the Euro.  Not all Forex currency trading is equal and banks and other large financial institutions will have access to more precise data based on customer interaction as well as the benefit of buying large quantities of foreign currency.

Those engaged in Forex Currency Trading must be aware of factors that change and determine the value of the currency on the market, aside from typical market forces of supply and demand.  In Forex currency trading, the rate of the London market is the accepted rate as these rates vary otherwise, depending on the currency exchange.

– GDP growth of the country

– Inflation

– Interest rates

– Budget and trade deficits

– Corporate acquisitions across borders

– Current political and social conditions in the country

Interest rates are the means by which government banks influence the supply of money, either by encouraging saving through high interest rates, or cutting interest rates to stimulate the flow of currency.  The actions of central banks have a large effect on the Forex currency trading of that currency.  Poor government budgetary policy, generally running current and future deficits will lower the value of the currency, reflecting investor concern about the long term viability of holding that currency.

Demand increases when a country is in good financial health, generally indicated by economic growth, low unemployment, a productive economy and retail sales.

Forex investors exhibit behaviors that can turn market conditions.  For instance, there is a preference for “safe haven” assets in times of instability and market turmoil.  These safe havens will experience higher value for their currency when their currency is perceived as strong.  The Swiss Franc and units of gold are currently considered safe havens and experience robust prices.

Forex investors will usually consider long term trends when making investing decisions.  Proven patterns exist in Forex currency trading and those that study these patterns will generally heed them when making investing decisions.  This is related to Forex currency trading decisions based on economic data, as data patterns generally indicate where the value of the currency will go, especially in light of weak economic data.

Rumors also play a large role in Forex currency trading and some may feel inclined to buy and sell on such rumors, with the expectation that the rationale behind the rumor will match expected patterns for foreign currency.

Exchange rates change every day, so you must use a currency converter that is updated daily, even hourly, to receive the best and most accurate quote.  Remember that currency converters will not incorporate the fees that will be charged by credit card companies, banks and exchange bureaus.  These added fees are generally posted with the exchange rates at the location of the business.  

The easiest way to find out the exchange rate is to type it into Google.  The first result will generally be the currency converter, provided you have entered the search term correctly.  For instance:

1. Type into the search bar:

o 1 USD to EUR

2. This will activate the currency converter, as there are two currency terms, representing the US Dollar and the Euro.  The results will display a chart showing the 5 year exchange rate trend and:

o 1 US dollar = 0.7492 euros

3. This number will obviously change from day to day. 

4. If you desire, you will be able to type other amounts into the currency converter tool

If you do not know the proper currency term, Google will generally recognize what you are trying to do.  So you may type “1 USD to Ruble” and the search results will display the currency converter tool with information on the Russian Ruble (RUB).  As you are using a search engine, finding the currency term for any country’s currency will not be difficult.

Of course, if you are at a store or tourist location, you may not have access to a computer, nor will checking every price be feasible.  Most mobile phones from the past decade (post-2000) will have calculators that have alternate currency converter functions.  You will simply need to add the current rate into the program and it will convert any amounts you punch in.  More advanced phones will have applications that update the currency rates regularly. 

 For a slightly lower tech alternative, a cheap handheld calculator will also work well.  Simply determine how much you will need to multiply the local currency to determine its value in your local currency.  For example, with the previous mentioned USD-EUR rate, you must multiply the Euro amount by 1.3 to approximate the value in USD.  Clearly, this method is less accurate at larger amounts, so you must use a proper currency converter before making a large foreign purchase.  This currency conversion will help you make a judgment on the value of the item.  

The calculator is also a valuable tool for haggling in countries where you do not speak the native language.  The majority of merchants around the world will recognize the Arabic numbers that we use to denominate value.  Just be sure that you are haggling in the foreign currency rather than your own to avoid a tragic breakdown in communication.

Currency conversion is the most basic form of participating in Foreign Exchange markets where two foreign currencies are exchanged at a rate determined by the market.  For example, if the currency conversion rate is 80 Japanese Yen to the US Dollar, then one will receive 80 JPY for 1 USD, before applicable fees taken by the currency conversion broker.  Any time the exchange rate decreases, the base currency is appreciating in value against the other currency.  Anytime the exchange rate increases, the base currency has depreciated against the other currency.

Most currency conversion brokers will offer different buying and selling rates and these rates will depend on a number of factors.  Most rates will account for the profit the broker will need to make in order to justify the transaction.  If the rate does not account for this, then there is usually a percentage commission on the transaction that will be quoted before the transaction and usually posted by the transaction rates.  All buying and selling rates depend on the local currency and the broker will usually exchange only in that local currency.

Buying and selling rates may also vary with the type of currency that will be converted.  There are generally surcharges for such electronic payments as the brokers must account for the costs of processing such payments.

Exchange rates will change based on supply and demand for that currency, so when demand is lower than supply the exchange rate will be lowered.  Changes in interest rates can spur speculation in a currency with higher interest rates leading to increased buying of the currency.

Pegging a currency means to manage a currency rather than having it exposed to the full extent of market forces.  For instance, the Chinese Yuan is pegged to the American Dollar and has been since the end of World War II.  The Breton Woods system was a system of pegged exchange rates between the US Dollar and several Western European countries before being scrapped in the 1970s in favor of the current market based Forex.  Currencies can be over or under valued as a result of pegs, due to trade imbalances.

Banks have been the general standard for typical currency conversion transactions with these financial systems holding large amounts of foreign currency.  Depending on the branch, the foreign currency may have to be requested in advance before the transaction can be carried out.  This retail currency conversion can take place in the US or in the foreign nation and will be very convenient if that bank has a branch in the foreign nation.  More common in tourist areas are Bureaux de Exchange kiosks, which will meet the needs of typical tourists by conducting a currency conversion from foreign currency into the local currency.  The commission or transaction rates are usually slightly higher than a typical bank.  One’s credit cards can sometimes be used abroad, depending on the company and international network.  The card can be used for purchases as well as receiving local currency through ATMs.

Forex describes the Foreign Exchange Market and is a financial system that trades currencies.  This enables countries to engage in trade with each other as well as investment and speculation in to the value of currencies by investors.  Forex is a popular traded asset due to its high liquidity, low barrier to market entrance and continuous trading.  This is opposed to the restricted trading hours of stocks and the vast number of investment possibilities associated with these investments.  By comparison, there are only a few major currency pairings in Forex.  There are however, different levels of access to the market, with large firms and banks receiving the best access and most accurate rates due to purchasing in high volume, compared to small investors.  Recent developments in software have led to automated Forex trading that enables the trader to set a “robot” to make trades on their behalf.  This saves the Forex trader a significant amount of time that would be spent micromanaging.

The majority of trading in Forex is speculation on the future value of the currency.  This means that the majority of traders is not buying the currency for actual use, but will be holding it as an asset, in hopes that factors affecting the currency, such as central bank policies will cause the value of the currency to rise, thus netting the trader a profit.  Other transactions would involve the buying of foreign currency for securities purchases for investors in one nation seeking to invest in another.  Traders will vary in their approach with some constantly trading in the day and emptying all assets by the end of  trading and others holding assets for lengthy periods of time to position themselves to take advantage of favorable conditions.

The trader will program the automated Forex trading tool to make trades based on preset criteria, generally buying a currency when it meets a certain threshold or selling a currency once its value has increased or diminished at a certain level.  More advanced programs may even include algorithms that predict potential market conditions and make trades with a stunningly successful profit/loss rate.  Most automated Forex trading programs tout the ability of the program to make “emotion-free” decisions, which stands in contrast to emotion-based trading where the investor may panic and sell early, trust their intuition and take a significant loss, or make a decision with poor or incomplete information on history trends on that currency.  In ideal circumstances, automated Forex trading takes the guesswork out of currency trading.

You may not be willing to trust your investments to an automated system, especially as it runs 24 hours a day and is constantly trading without supervision.  While this is advantageous for some, if the “robot” lacks sufficient safe guards to monitor losses, then it may make poor trades.  Many automated Forex trading programs will not account for news and relevant market factors.  Whereas a human trader would be able to factor news of central bank interventions and potential instability, the automated Forex trading program will only catch onto the trend with a constantly analysis of the movement on the asset.  Therefore, a human could theoretically react quicker on tips and new developments than the program could.  Some automatic Forex trading firms will compensate for this by automatically updating the program with these tips and trends, but this will not be the case for all programs.