12:26 PM
RM PART TIME BLOG
What Is Forex?
The foreign exchange market or currency market, known informally as Forex, is an over-the-counter trading instrument where one currency is traded for another. It is the most traded market in the world, with an average turnover of $3.2 trillion per day. (Source: Bank for International Settlements, September 2007)
Forex trading requires the knowledge and business information to make money through trading foreign currencies.
Today Forex trading is made possible through technology advances of the internet. Online forex trading can be done while your at office work, or after working hours, while at home and there is no selling any products or recruiting members, simply type and get paid payments sent weekly via paypal. Today online Forex trading is many business people, homemakers, executives, teachers, lecturers, doctors, lawyers favourites home based business either full-time or part-time. You can sit at your PC or netbook or iPad or iPhone and trade from home without having to make any phone call or referring to any bank.
How is it possible?
There are many brokerage companies online that are available (brokers list) that enable you to buy and sell different currencies through the online. These brokers also offer through their website softwares that enable you to trade online. For any trade that you make, you pay a small commission to the brokerage company that you are trading through it.
Profit money that you made will be deposited into your account and you can withdraw the money through wire, TT or online Paypal method.
What currencies can you trade?
Trading in Forex requires to deal with currency pairs and there are four main currency pairs
1. British Pound and USD (GBP/USD)
2. Euro and USD (EUR/USD)
3. USD and Japanese Yen (USD/JPY)
4. USD and Swiss Frank (USD/CHF).
The first currency works as commodity and the second one works as money.
For eg. if you select GBP/USD to trade, and you buy/sell British Pound against USD. Because it is traded online using the software, all exhanges and transactions are automatic.
How do you make money in Forex?
Buying low and selling high or selling high and buying low is the base of making money in Forex. For eg. 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.
The fundamental of making money of trading Forex is by understanding economic fundamentals and predicting the movement of the currency. To the big question is that how do you know the best time to buy and how you can predict that if you buy, when will the price will go up and you will make a profit? To a successful trader, this is the most important question.
There are two methods to know the best time to buy and sell:
1. Technical Analysis
2. Fundamental Analysis.
The method used in technical analysis is based on predicting the direction of the price using the the price chart analysis and also with special tools that are called Indicators.
As the word implies, technical analysis is a science and it is important to learn how to trade using this technique trading on Forex. It is easy to learn the technical analysis because nowadays there are alot of free resources over the internet and also in my blog.
Fundamental Analysis is a method that is used to predict the future movements of currencies’ prices, according to the economic, political, and geo-social events at developed countries like USA, UK, Germany, Japan.
Traders can utilize these news on events to predict changes to the trading for long term or short term. For eg. the recent even of earthquake and tsunami that ravaged Japan, when the news flashed over the TVs and radio's and news, Japan currency became weaker agains the USD value and people start selling Japan currency. 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.
Why Forex as your BEST ALTERNATIVE INCOME:
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 trading as your part-time business, you will not have to be worried about competition.
Best Regards,
Jason Ekbana
Warning: Forex Trading involves substantial risk of loss, and may not be suitable for everyone.
