Online currency exchange offers a massive money making opportunity to the savvy investor who is prepared to take a risk and speculate on the currency market.
Also known as the FOREX or foreign exchange market, this is a global trading arena that is open 24 hours a day from Monday through Friday. This is because no matter what time it may be where you live, there is always somewhere in the world that is open for business.
The Forex Market is the largest financial market in the world. The current amount of daily trading done in the Forex market is around 3 Trillion dollars. By comparison, the New York Stock Exchange trades around 30 billion dollars a day.
The 24 hour market provides many opportunities for traders that do not exist on the normal stock market.
For example, you can still have a day job and trade currency from home in the evenings or early mornings. You are not limited to trading your own country’s currency either. This can be an advantage during times of economic crisis when price movements in one currency pair may be difficult to predict, but others are relatively stable.
Currently the U.S. Dollar is going through a time of great turmoil. With much inflation on the horizon due to stimulus and the printing of trillions of dollars, FOREX can be one way to invest your money outside the realm of the U.S. Dollar.
How To FOREX Trade
Currency is always traded in pairs because you have to give one currency in order to buy another. You will see the different pairs written with their three letter codes, such as EUR/USD for the euro and US dollar. Prices will depend on the economic situation of the relevant countries.
If you are used to dealing in stocks, this may be confusing at first, but you can think of it as if you were buying stock in a whole country.
If you live in Canada then you would need to find out the Canadian exchange rate against the US Dollar or if in Europe the best Euro exchange rate again against the US dollar as the green back is the principle currency of the foreign exchange market.
To get started you just need a computer with a good fast internet connection. You cannot trade forex
with a dialup connection, it would be too slow. Your computer will need to display prices that are changing very rapidly, and you will want to act while the price is in the right zone.
In previous times you needed thousands of dollars to open a FOREX trading account with a broker but that has all changed now. As well as the old style standard accounts, many brokers offer mini and micro accounts where you can trade position sizes that are just 10% or 1% of the standard lot size. This means you can start out with just a few hundred dollars.
How to Practice Currency Trading
Fortunately, you do not have to start right out risking real money. You can sign up for a dummy or demo FOREX account with most brokers. This allows you to try out their trading platform, opening and closing dummy trades according to the real time FOREX prices. You can also test out systems in demo mode and keep track of your gains and losses.
Online currency exchange is fast moving and high risk. You must expect some losses and if your risk management is not good, you may see your start up funds wiped out. Be careful not to risk too much on one trade, no matter how confident you are.
Also there is no substitution for traditonal learning. There are many online courses that promise you the ability to “GET RICH” over night, with no experience, and no need to do any learning on you own. The truth is you WILL be able to make lots of money on FOREX, but only if you take the time to learn what you are doing. Online courses may be good but nothing beats reading the book first. The same way every college course comes with a professor AND A BOOK. Get a good FOREX training course or book and follow it until you are confident enough to risk real money.
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