FOREX trading involves trading foreign currency, stocks, and similar type of products. The currency of one country is weighed against the currency of another country to determine value. The value of that foreign currency is taken into consideration when trading stocks on the FOREX markets.
There are people who have been making money through Forex from many years ago. Fortunately, with the help of computer and internet, Forex trading has become much easier. You can sit at your personal computer and trade from home without having to make any phone call or referring to any bank.
How is it possible?
There are broker companies that enable you to buy and sell different currencies through the Internet and some simple softwares. For any trade that you make, you pay a small commission to the broker company that you are trading through it.
You need to find a good, reliable and well-known broker company and sign up for an account with it. Then you have to fund your account. You use the money you have in your account to trade. Any profit that you make, will be added to your account and vise versa. Then you can withdraw the money you have made.
What currencies can you trade?
In Forex, you deal with currency pairs. There are four main currency pairs: British Pound and USD (GBP/USD), Euro and USD (EUR/USD), USD and Japanese Yen (USD/JPY), USD and Swiss Frank (USD/CHF).
In each currency pair, the first currency works as the commodity and the second one works as the money. For example when you choose the GBP/USD to trade, if you buy, you buy British Pound against USD and if you sell, you sell British Pound against USD. It doesn’t matter what currency you have in your account. The trading software makes the exchanges automatically.
How can you make money?
Buying cheap and selling expensive or selling expensive and buying cheap is the base of making money in Forex. For example If you buy GBP against USD when each GBP is equal to 1.5554USD and then sell it when it is 1.6800 USD, you have made a profit.
However the key question is that how do you decide the best time to buy and how can you predict that if you buy, the price will go up and you will make a profit. This is the most important question and determines you0r success as a trader.
There are two methods used to determine the right time to buy and sell: Technical analysis and Fundamental analysis.
In technical analysis, you can predict the direction of the price by analysing the price chart with the help of some special tools known as Indicators.
Technical Analysis is a science and if you want to start Forex Trading, you will have to learn it comprehensively especially if you want to trade on a daily basis. It is not too difficult and if you are focussed upon learning you can master technical analysis in several months. However there are some excellent training courses available online and I suggest that you check some of them out to improve your chances of success. I will also be providing lots of content rich articles in my blog over the coming weeks to provide those new to Forex Trading with invaluable information to get started and improve their results.
Fundamental Analysis is the other method. This method is used to predict the future of currency values according to current economic and political influences. Fundamental analysis has a long term usage but experienced traders can predict sudden changes that may occur in the money markets after an important economic event has occurred in one of the big five (USA, UK, Japan, Germany, China). For example if the news says that the UK economy has grown by 2.5% compared to last month the Pound will become stronger and people will start buying it. Therefore the value of Pound will go up because of the sudden increase of demand. If you know the effect of the news on the currency price, you can take the correct position and make money. However if you back the wrong currency you will end up losing money.
Recently a new approach for Forex Trading has appeared. There are some automatic systems often referred to as Forex Robot or Forex Autopilot these programs find and report the buy and sell signals automatically increasing substantially your profits, however I will discuss these in more detail in the coming weeks. In the mean time I would recommend that you take a look at Fap Turbo
http://www.fapturbo.com/?hop=jcurtis80 which undoubtably one of the best Forex robots available, people are making serious money already with this.
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