If you’re new to forex trading, you’ve probably heard about how much easy money you can make by trading currencies. But can you really make easy money with forex? Well, the answer is this: only if you know how to speculate.
Profitability in the forex market really depends on how well you can predict forex rates, or when a particular currency might rise or fall in relation to another currency. This skill can be developed by getting intimately familiar with the different factors that determine forex rates, including:
* A country’s economy
* Global, regional and national political conditions
* Market psychology
* Forex trading algorithms
If you want to know more about the forex factors mentioned above, you can do so by visiting expert bloggers in forex trading.
If you want to make money in forex trading, open an account with a forex broker. Unlike stock trading, forex trading is decentralized and there are only financial hubs where you can buy and sell currencies.
As we said before, easy money with forex really depends on how well you can predict the rise and fall of foreign exchange rates. Based on the experience of thousands of retail traders, this is an acquired skill that can only be honed with daily trading. This is fine and all. However, the problem comes when you trade with real money.
That said, it is important that you trade with demo forex accounts before going out there with your money. If demo accounts bore you, start by trading small. There are forex brokers out there that let you trade for only $25.
There are brokers that allow leverage trading, which lets you buy currencies ten times the actual amount money you put in. With $25, you can trade at the $250 cap. The most traded currencies are the Australian dollar, British Pound, Euro, US dollar, Yen, Swiss franc, Canadian dollar, Hong Kong dollar, Swedish Krona and the New Zealand dollar.
Over the years, forex trading has eased out stock trading in terms of popularity in the investing world. There are many reasons for this. For one thing, you are not tied to a stock exchange like Nasdaq. All you need is a computer and Internet connection and you can trade from anywhere in the world. The market trades 24 hours a day, 5 days a week.
But perhaps the biggest factor that makes it popular is that there are no inherent market biases, like bullish and bear markets, as in the case of stock exchanges. There are many methods for forex trading as you shall see below.
• Robot trading systems – These platforms tell you when to enter and exit a trade. Not surprisingly, because of their convenience, forex robots have become the favorite among retail traders.
• Indicator-based trading – With this method, you try and predict the price movement of a currency pair by analyzing so-called lagging indicators.
• Scalping – With this method, you jump in and out of trading quickly for small and quick profits.
• Core price trading -This method is probably the least confusing among the trading methods. With it, you analyze a clean price to make a trade. It means that you trade using the core price data of the forex market.
Again, if you want to know more about the different trading methods mentioned above, learn more from people who are earning a full-time income from forex trading. As we said before, speculating on the movement of currency prices are acquired skills, and there is a real danger of you losing a lot of money especially in the beginning. That said, only trade with money you can afford to lose.