Today I want to tell you some things about Forex Trading, which fascinated me since I´ve first heard about it some days ago (no, I´ve heard from it even some years ago, but didn´t realized it´s potential so far). Sure, it isn´t anything for fast money and for those who won´t take any risk, but as I said, I´m really fascinated about this money making opportunity and so I want to tell you about it here.

Forex Trading isn´t the usual way for making money online in terms of all the other posts I´ve written so far here on my blog which deal about paid-to-click programs, advertising networks like Bidvertiser, sponsored posts or selling text links. But, what Forex Trading has in common, is that you can do it online (or call it work-from-home) like all the other programs I´ve spoken about so far.

What is Forex Trading?

First things first, I´m NO expert in the field of Forex Trading or trading in general (not yet). But I´m expert enough to understand the most basic principles involved with it. So I want to share my “knowledge” with you, but I´m also willing to learn more about it, so please feel free to give me some comments and tips for a newbie like I am.

The name Forex is an abbreviation for Foreign Exchange market, sometimes also called only FX. As the name suggests, the whole thing is about the worldwide currency market. The Forex market is the most established market in the world with a daily(!) trading volume of over $2 trillion, an amount of money beyond anybody´s grasp.

Basically, trading on the Forex market means trading with different currencies. You can buy currencies against other currencies with the goal of making profit from changing exchange rates. For example say you buy some Euros today and, considering the steady increasing rate of the Euro, you sell it the other day, you´ll likely make some profit because the exchange rate has increased and your bought Euros are worth more than the day before (so, this doesn´t work on an everyday basis). You can trade 24 hours a day, 365 days a week, so it´s a really fast market because you can make profits within hours or even minutes if there´s enough change in the currency rates.

On the Forex market you can trade with different currency pairs like EUR/USD (e.g. buy Euros with US Dollars) or GBP/AUD (e.g. buy Brithish Pounds with Australian Dollars). The available pairs depend on the market maker you choose, meaning the “online service” you´ll use for trading currencies online. There are usually around 10 to 20 different pairs available, including the most important ones like the US Dollar, Euro or Yen. Those market maker provide you with the actual exchange rates for example in the following form: EUR/USD 1,4712/15. Looks a bit strange at the first look, but it isn´t that difficult. The first number (1,4712) shows the current selling price, the second number the buying price (only the last two digits to save some space). So this example would mean that you could buy one Euro with $1,4715 and sell it for $1,4712 (the gap between those two prices is called spread, which goes to the market maker because they must finance their services too

If the exchange rate now increases and you sell your previously bought Euros, you make profit, easy isn´t it

Where can I trade on the Forex market?

I´ve mentioned those market makers earlier. One can say that these are like companies offering you services to deal with different currencies online. Most times you can join them for free and don´t have to pay comissions or fees for trading (you only have to take into account those spreads I´ve mentioned earlier). The most of them provide you with a software or an online panel where you can see the current exchange rates, analyze statistics, read current market news and, the most important part, make the deals.

I´ve seen some market makers where you can start with a balance as low as only $50, so you won´t have to take the risk in loosing a lot of money. It´s nice for a fast start and it will help you in learning the principles. Some companies even provide you with a demo account, where you make deals in theory (but you won´t make any money), perfect for a first look into the world of trading. I´ve signed up for a demo account some days ago with a balance of $50,000 (an amount of money far beyond from what I´ve ever seen…). And I must say it´s really awesome, I´ve made $2600 in profit within only two days!

There are some downsides

Never think about trading on the Forex market as a gold mine! With the right knowledge, a good understanding of statistics to predicts trends and the right timing you can make some decent profits. But you can also lose a huge amount of money very fast if something unpredictable happens on the market!

The second thing is the cash balance you are personally able to use. Basically the more cash you have, the more profits you can make. But this doesn´t mean that you can´t start trading on this market, it´ll only take longer until you actually see good profits.

Conclusion

You see, I´m very excited about the whole Forex thing. I could write dozens of more paragraphs about it, including leverages, margins, statistic analysis…, but I won´t scare my readers away. I´m also in the wrong postions to provide you with more detailed information because I´m fairly new and still learning all the facts and theory.

But I see a huge potential in trading with different currencies and I´m likely to do it by myself as I´ve gained more knowledge and feel more comfortable with it. I also won´t be able to invest thousands of dollars, I can only start very small trying to make even some small profits. But I think it could work for the long term. Let´s see.

I´ll write about my current progress in Forex Trading later on. For now I must read more tutorials and learn, learn, learn.

Best Regards!
Querblogger