March 23, 2011
What is FOREX trading? How to make profit from it?
By Planet Wealth
Anyone here has experience with Forex traiding? Does it matter which country you are from or anyone can participate on online Forex traiding sites(Im an EU national)? Do you requiere a broker for this kind of currency trading? Is it worth it? Thank you!
Topics: trading tips | 10 Comments »
10 Responses to “What is FOREX trading? How to make profit from it?”
Comments
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March 23rd, 2011 at 5:32 pm
Forex trading is a excellent way to get into financial investing If you don’t have a large capital, don’t have all day to spend on market analysis and aren’t a financial expert.
When it comes to capital, forex brokers enable you to trade with leverage, so you can control large amounts of currency with only a small investment. For example, you can buy 10,000 units of EUR/USD by investing $100 with a leverage of 1:100. You can trade without a broker but it’s much harder to access the market and you’d have to invest a lot more of your own capital to see any returns on your investment.
As for time, there are a lot less instruments in the forex market than in any other financial market- only 8 major currencies – so you can monitor trends and fundamental economic factors much more easily.
Forex trading is illegal in some countries that don’t allow financial trading, but not in the EU. Every European country has a national body that regulates forex trading so it’s perfectly legal and anyone can do it.
You can learn about forex trading on the eToro site, where we provide you with an entire educational center including forex guides, glossaries and a specially developed forex e-course. You can then practice your skills with a free demo account which you can open here: http://ow.ly/2ULaF
At eToro you can also participate in the world’s largest investment network, eToro OpenBook where you can follow profitable traders, view their strategies and even copy trades instantly. Go to http://ow.ly/2ULec to check out OpenBook for yourself, no sign up required.
We wish you pleased trading,
The eToro Team
March 23rd, 2011 at 5:32 pm
I trade Forex and have a site with a lot of free info http://www.myforexdot.org.uk . Be really careful though, there are so many scam artists looking to rip people off in this area.
Never pay for any ‘holy grail’ indicator, ‘robot’, ‘trading system’ or anything else. If you want to buy anything buy some excellent books with excellent reviews on Amazon.
Spend a long-time learning BEFORE trading with real money, if you want to see what it’s like to trade get a free demo account.
Excellent luck
March 23rd, 2011 at 5:32 pm
Forex trading is forex exchange trading which involves buying and selling currencies. Traders normally buy or sell a currency hoping that the currency increase or decrease in it’s value and benefit from those differences. I will clarify you with a simple example.
You want to trade on the currency pair EURUSD and buy it hoping that it increases in its value. That means you are buying Euros selling USD. Lets say one EUR is 1.5000 USD. For buying 1000EUR you need to spend $1500. The currency increased in its value as you expected and it became 1.5100. That means you made a profit of 100 pips.(In forex it is measured in terms of pips). Lets say you have a standard account with a leverage of 1:100. Then this 100 pips means $1000.
Does it matter which country you are from or anyone can participate on online Forex traiding sites(Im an EU national)?
You need to have a broker to participate in forex trading and it depends on the broker when they are offering their services in your country. For EU most of the brokers are offering their services. Check
http://www.fxcm.com
http://www.alpari.com
http://www.forex.com
Do you require a broker for this kind of currency trading?
Yes. You need a broker for participating in forex. Check the above resources.
Is it worth it?
It really depends on how much experience you have in forex. You need to know a lot of common terms in forex. If you are a beginner I recommend you to trade on a demo account first. Check the following resources that helps you.
What is spread?
http://www.forexbees.com/what-is-spread-in-forex-market/
http://www.youtube.com/watch?v=oEemlMucBs8
What is leverage?
http://www.forexbees.com/leverage-in-forex-trading/
http://www.youtube.com/watch?v=-N1NooMMuQQ
What is pip in forex trading?
http://www.forexbees.com/what-is-a-pip-in-forex-trading/
http://www.youtube.com/watch?v=j3849i8xHZc
How to open an account in forex?
http://www.forexbees.com/how-to-open-an-account-in-forex/
Hope this information is useful to you.
March 23rd, 2011 at 5:32 pm
Homework:
Google Forex Scams.
Make sure you are aware of all the scam companies out there.
From Money Magazine:
Only 20% of first time investors make money in Forex.
You are competing against serious professionals that know how to milk the market.
If you dwell in Forex, make sure you know what you are doing..
March 23rd, 2011 at 5:32 pm
Playing Forex can appear alluring, but the majority of people who try it lose money. All you have to do is do a web search on the words "Forex" and "lose" to see this is the consensus.
Forex is similar to what we call a "zero sum" game. You are making a bet with someone else about whether a currency will rise or fall. For every winner there has to be a loser. The net winnings of everyone combined equals zero. If you are smarter than the average player, you may make money. If you are dumber than the average player, you are likely to lose money. Most of the people making the "bets" in Forex are highly trained professionals at banks and other institutions. You are unlikely to beat them at this game.
Really Forex is not quite a zero sum game. It’s a slightly negative sum game as the Forex broker takes a small percentage each time in the spread. It’s a small amount but over a hundred trades, it ends up being a considerable amount of money. So the average player is likely to lose money, and remember the average player is a highly trained professional and probably smarter than you.
There is a lot of luck in Forex, and if you play it, you will have some periods of time where you make money. This is usually because you are having a lucky streak, not because you have suddenly become an expert Forex player. But, most people are unwilling to admit their success is due to luck. They become convinced they have a system that works, and lose a lot of money trying to refine it.
Further complicating the problem is the large number of Forex scams on the internet. Most Forex websites are of questionable honesty. You will find many people on the Internet that claim they made a lot of money using Forex. They are usually liars trying to make money. They will say: "Go to Forexcrap,com/q2347." The "q2347" is a signal to the Forexcrap site that you are being referred to them by "q2347." If they sell something to you, "q2347" gets a kickback. These coded signals can be hidden by different methods in the link. Other people will refer you to their own private website or blog for the purpose of trying to get money off you. Also there are a excellent number of trolls out there that like to pretend they are successful forex traders just for the fun of it.
I would recommend not trying to do Forex at all, unless you are a trained professional. It’s like playing poker with people better than you, with the house constantly taking a small percentage from the pot.
Read the warnings in the links below:
March 23rd, 2011 at 5:32 pm
Forex is leveraged and very quick moving so not really for beginners.
Take your time to learn the basics of trading first as it will save you a whole lot of money and sleepless nights.
Take a beginners course or try virtual trading to find out what it is like. That will give you a fantastic introduction to trading and investing.
March 23rd, 2011 at 5:32 pm
If you are asking these questions, you are far from being at a stage where you can trade.
You really need to buy a basic education about Forex and the market, plus its risks and characteristics, before you even contemplate going into it.
Borrow some books from your library, or search the internet for tutorials. once you have a basic understanding, you can proceed further.
If you bulldoze your way in without knowledge, you will become roadkill for the professionals. They will eat you for lunch.
March 23rd, 2011 at 5:32 pm
I just wrote an brilliant book on forex trading for beginners that you can download for free called "The Forex Lifestyle". It has everything from how the actual BUY and SELL trades work, to charting tutorials, learning about pips and some of the math involved, how to find excellent brokers and auto-trading robots. This will get you started learning about forex, which is really quite fascinating, but maybe not for everyone. Take a look and see for yourself.
March 23rd, 2011 at 5:32 pm
Forex trading is typically done through a broker or market maker. As a forex trader you can choose a currency pair that you expect to change in value and place a trade accordingly. For example, if you had bought 1,000 Euros in January of 2005, it would have cost you around $1,200 USD. Throughout 2005 the Euro’s value vs. the U.S. Dollar’s value increased. At the end of the year 1,000 Euros was worth $1,300 U.S. Dollars. If you had chosen to end your trade at that point, you would have a $100 gain.
March 23rd, 2011 at 5:32 pm
The foreign exchange market (forex, FX, or currency market) is a worldwide decentralized over-the-counter financial market for the trading of currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies.
In a typical foreign exchange transaction, a party buys a quantity of one currency by paying a quantity of another currency.