What Is Forex?
Forex is the knowledge and business of making money through
trading currencies against each other. Forex is not a new business
and its history is as old as the history of money.
What is forex is a question that people ask a lot these days. 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 brokerage 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 brokerage company that you are trading
through.
You need to find a good, reliable and well-known brokerage
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 visa 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 commodity and
the second one works as money. For example when you choose
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 takes care of the exchanges and transactions
automatically.
How can you make money?
Buying low and selling high or selling high and buying low is the
base of making money in Forex. For example If you buy GBP
against USD when each GBP is equal to $1.9554USD and then sell
it when it is $2.0235USD, you have made a profit. I don’t want to
focus on more details in this article and explain how the profits
and the money you make will be calculated. I will talk about these
topics in other articles.
But the big question is that how you can find out the best time to
buy and how you can predict that if you buy, the price will go up
and you will make a profit? This is the most important question
that makes you a successful trader.
There are two methods to know the optimum time to buy and
sell: Technical and Fundamental Analysis.
In technical analysis, you can predict the direction of the price
using the the price chart analysis and also with the help of some
special tools that are called Indicators.
GBP/JPY price chart with three indicators: RSI and MACD
Technical Analysis is a science and if you want to start working on
Forex, you have to learn it properly, especially if you want to
work as an intraday trader. It is not too hard to learn the technical
analysis. If you are a focused and a serious person, you can learn
technical analysis in a few months. There are a lot of free
resources over the web that you can use to learn. There are some
expensive training courses, but those who sign up for them are
not happy and believe that they have learned nothing. So don’t
waste your money. If you are serious to learn, there are a lot of
free resources over the Internet. You can also visit this weblog
every now and then or subscribe for my RSS feed. I will try to
share my experiences with you.
The other method is the Fundamental Analysis. This method is
used to predict the future movements of currencies’ prices,
according to the economic and even political situation of the world
and important developed countries like USA, UK, Germany, Japan
and… .
Fundamental analysis has a long term usage but good traders can
predict the sudden changes that happen after releasing an
important news about economic situation of an important
country. For example when the news says that economic
situation of USA is improved for 5% in comparison to the last
month, USD will become stronger and people start buying it. So
the value of USD will go up because of the sudden increase of
demand. If you know the effect of the news on the price, you can
take the proper position and make money. Of course there are
two sides in this story which means if you take the wrong
position, you will lose.
Experienced and professional traders take the advantage of both
technical and fundamental analysis whereas 99% of traders are
dependent on the technical analysis.
Some good things about Forex:
1- Forex is an online home based business that doesn’t need
referring, recruiting and advertising. You only deal with the
currencies through the Internet. So you will not have to reply any
email, make any phone call and spend any money on advertising.
2- If you learn Forex trading properly, you can make a lot of
money. Forex can be your full time job that makes thousands of
dollars for you every month. I have to emphasize again that if you
start working on Forex before you learn it properly, it can be risky
and you will lose your money. It is like driving. If you drive a car,
before you learn to drive properly, you will hurt yourself and
others but if you learn it properly first, it will be pleasant and
funny.
3- You can make a lot of money by spending a small amount of
money. Unlike other investments like stock market that you have
to invest a lot of money to make a reasonable profit, you can
make a good income through investing small amount of money.
For example, with a $5000 account, you can make about $5000
per month. Of course it highly depends on the way that you trade
and the strategy that you follow but good and experienced traders
can double their money every month.
4- Forex - and of course stock market - are the only businesses
that competition has positive impact on them. It is amazing, isn’t
it? Competition is the biggest problem in all other businesses but in
Forex, it helps the traders to make more money. Why?
Supply and demand are the factors that determine the price in any
market. When there are too many buyers and sellers, price
volatility will be much higher and market will be more dynamic.
Price will go up and down more frequently and this is what we
need to make money. When price goes up we buy and when it
goes down we sell and make profit.
So if you choose Forex as your business, you will not have to be
worried about competition.
What is Forex? If you are looking for a business to make money
full time or part time, Forex is the best option. It can make
reasonable decent income for you and on the other hand, you will
not have to be worried about the problems like marketing,
advertising, referring and recruiting and even you will not have to
be worried about competition.
und 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 visa 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 commodity and
the second one works as money. For example when you choose
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 takes care of the exchanges and transactions
automatically.
How can you make money?
Buying low and selling high or selling high and buying low is the
base of making money in Forex. For example If you buy GBP
against USD when each GBP is equal to $1.9554USD and then sell
it when it is $2.0235USD, you have made a profit. I don’t want to
focus on more details in this article and explain how the profits
and the money you make will be calculated. I will talk about these
topics in other articles.
But the big question is that how you can find out the best time to
buy and how you can predict that if you buy, the price will go up
and you will make a profit? This is the most important question
that makes you a successful trader.
There are two methods to know the optimum time to buy and
sell: Technical and Fundamental Analysis.
In technical analysis, you can predict the direction of the price
using the the price chart analysis and also with the help of some
special tools that are called Indicators.
GBP/JPY price chart with three indicators: RSI and MACD
Technical Analysis is a science and if you want to start working on
Forex, you have to learn it properly, especially if you want to
work as an intraday trader. It is not too hard to learn the technical
analysis. If you are a focused and a serious person, you can learn
technical analysis in a few months. There are a lot of free
resources over the web that you can use to learn. There are some
expensive training courses, but those who sign up for them are
not happy and believe that they have learned nothing. So don’t
waste your money. If you are serious to learn, there are a lot of
free resources over the Internet. You can also visit this weblog
every now and then or subscribe for my RSS feed. I will try to
share my experiences with you.
The other method is the Fundamental Analysis. This method is
used to predict the future movements of currencies’ prices,
according to the economic and even political situation of the world
and important developed countries like USA, UK, Germany, Japan
and… .
Fundamental analysis has a long term usage but good traders can
predict the sudden changes that happen after releasing an
important news about economic situation of an important
country. For example when the news says that economic
situation of USA is improved for 5% in comparison to the last
month, USD will become stronger and people start buying it. So
the value of USD will go up because of the sudden increase of
demand. If you know the effect of the news on the price, you can
take the proper position and make money. Of course there are
two sides in this story which means if you take the wrong
position, you will lose.
Experienced and professional traders take the advantage of both
technical and fundamental analysis whereas 99% of traders are
dependent on the technical analysis.
Some good things about Forex:
1- Forex is an online home based business that doesn’t need
referring, recruiting and advertising. You only deal with the
currencies through the Internet. So you will not have to reply any
email, make any phone call and spend any money on advertising.
2- If you learn Forex trading properly, you can make a lot of
money. Forex can be your full time job that makes thousands of
dollars for you every month. I have to emphasize again that if you
start working on Forex before you learn it properly, it can be risky
and you will lose your money. It is like driving. If you drive a car,
before you learn to drive properly, you will hurt yourself and
others but if you learn it properly first, it will be pleasant and
funny.
3- You can make a lot of money by spending a small amount of
money. Unlike other investments like stock market that you have
to invest a lot of money to make a reasonable profit, you can
make a good income through investing small amount of money.
For example, with a $5000 account, you can make about $5000
per month. Of course it highly depends on the way that you trade
and the strategy that you follow but good and experienced traders
can double their money every month.
4- Forex - and of course stock market - are the only businesses
that competition has positive impact on them. It is amazing, isn’t
it? Competition is the biggest problem in all other businesses but in
Forex, it helps the traders to make more money. Why?
Supply and demand are the factors that determine the price in any
market. When there are too many buyers and sellers, price
volatility will be much higher and market will be more dynamic.
Price will go up and down more frequently and this is what we
need to make money. When price goes up we buy and when it
goes down we sell and make profit.
So if you choose Forex as your business, you will not have to be
worried about competition.
What is Forex? If you are looking for a business to make money
full time or part time, Forex is the best option. It can make
reasonable decent income for you and on the other hand, you will
not have to be worried about the problems like marketing,
advertising, referring and recruiting and even you will not have to
be worried about competition.
by ROTMANLUV 2023-07-08, 17:34
