Feed on
Posts
Comments

There are many ways by which one can multiply their investment. Whilst some of them seem to be outright scams, some are as genuine as they seem to be. Forex Trading is a genuine way by which you could make money. And as they say, nothing in this world comes free, you can make money in Forex Trading only if you use your mind. Using your mind with a little bit of luck on your side will make you very successful in Forex Trading.What are the fundamentals of Forex Trading?

Meanwhile, it is important that the meaning of Forex Trading is understood. One needs to understand the basic operating principle of Forex Markets and how Forex Trading occurs. Let me open the discussion by saying that this type of trading is slightly different from the Futures or the Stock Market Trading. In Forex Trading, you primarily bet your money on the currency valuation of two currencies.

In Forex Trading, you sit in front of your computer and monitor the movement of two currencies. Let’s say that you have the EURO and the US Dollar on your radar. Thus, you bet your money on the combination of EUR (Euro) and USD (US Dollar). Let’s assume that the EUR is pegged at 0.98 USD and you open your trade. After you invest the money, you see the value of EUR rising and slowly it reaches 1.07 USD. This time you make up your mind to book your profits. By doing so, you exit the market. At the end of the day, you would have made a profit of 0.09USD on one unit of the trade.

How can Forex Trading be done?

Forex Trading can be done through 4 major centers across the world. Thus, one can say that the Forex trading is a global activity. You can do Forex trading by not leaving your home. In fact, there are many forex trading software in the market that will allow you to trade from your computer.

Understand the currency movements

To do well in Forex trading, you need to understand the movement of the different currencies. It is also important that you keep an eye on your profits and losses. Assuming you start the trade with 1 EUR = 0.98 USD, you should have a fair idea on where you want to exit the trade. Though, closing your deal when the valuation of your currency is high would be advisable, you can also close out when the currency you placed the money closes slightly lower.

In this case, if you opened the trade at 1EUR = 0.97USD, you should ideally be closing when the value is at 1EUR= 1.08USD or greater. That said, you could also close at any margin between 0.97USD and 1.07USD. In very rare cases, I have seen traders close with a loss. The important thing you need to know is that there are a lot of external factors that impact the movement of the currencies.

The benefits of doing Forex Trading

? It is a 24-hour market. Unlike the stock markets that have a fixed opening and closing time, forex trading happens round the clock.
? It does not require you to be physically present at the trading venue.
? The mode of operation of forex trading is simple. Just monitor the movement of two currencies and make your trade moves.

Bottom-line, forex trading is a very attractive method for you to make money. With the benefit that you will be able to do so sitting in front of your computer, all you have to do is to understand some fundamentals of Forex Trading.


RSS feed | Trackback URI

Comments

No comments yet.

Sorry, the comment form is closed at this time.