First of all, make sure that you read the news everyday. Look for meaning behind the news, try to interpret the news you read and try to visualize how it will affect the currencies that you have in your portfolio.

Factors that affect the supply and demand of a currency:

Economic Growth:

Investors want to be sure that they are investing in a solid economy that is achieving steady growth. Currency traders looking to assess the economic growth of a country will look at unemployment, trade, and GDP data.

Bad- Rise in unemployment			Good- Fall in Unemployment
Bad- Fall in GDP			Good- Rise in GDP
Bad- Fall in Exports			Good-Raise in Exports

Interest Rates:

Money tends to follow interest rates. If interest rates go up, money will flow into the country from all over the world as investors seek to capitalize higher returns. To determine whether interest rates will rise or fall, investors pay attention to economic inflation indicators as well as speeches by influential figures. Generally, the timing of interest rate moves are known in advance. They take place after regularly scheduled meetings by the BOE, FED, ECB, BOJ, and other central banks.

Good- Rise in Interest Rates

Bad- Fall in Interest Rates

Political Stability:

Election turmoil, changes of government, high unemployment and international conflict all make investors cautious to put their money in a given country. Investors will watch for major news that comes out of a country.

Bad- Geo-Political Tensions

Bad- Natural Disasters

Bad- Threat of Terrorism

The last advice is before you actually open a real Forex account; try to open a free practice account so that you can learn the secrets of Forex trading without actually loosing any real money. Then after you get a full understanding on how to trade Forex, go ahead and open a Real Forex Account.