Sunday, November 9, 2008

How To Earn Serious Money With Forex

The currency trading (Forex) market is the biggest and the fastest growing market on earth. Its daily turnover is more than 2.5 trillion dollars, which is 100 times greater than the NASDAQ daily turnover.

Markets are places to trade goods. The same goes with Forex. The Forex goods (or
merchandise) are the currencies of various countries. You buy Euro, paying with
US dollars, or you sell Japanese Yens for Canadian dollars. That's all.

How does one profit in Forex?

Very simple and obvious: buy cheap and sell for more! The profit is generated from the fluctuations (changes) in the currency exchange market.

The nice thing about the Forex market, is that regular daily fluctuations, say -
around 1%, are multiplied by 100! (in general Forex companies offer trading
ratios from 1:50 to 1:200). If, for example, the exchange rate of "your" pair of
currencies increased by 0.6% in the last 4 hours, your profit will be 60% on
your investment! Such can happen in one business day, or in a few hours, even
minutes.

You can implement your choice (the pair of currencies, the volume amount) under
any direction to which the market is moving, and yet make profit. It does not
matter whether the exchange rate is going up or down: you can always decide to
buy Euro and sell dollar, or vice versa - buy dollar and sell Euro. You don't
have to physically possess certain currencies in order to perform "buy" or
"sell" with them.

How do I trade Forex?

You select the pair of currencies with which you wish to make a Forex deal. You determine the volume (the amount of the deal). You deposit the "margin" (collateral needed to facilitate the deal. Usually - only a very small portion of the whole deal, say: 1% or 1:100).

Before you finally activate the deal, you can still "freeze" it for a few
seconds. That enables you to either change the terms, or accept it as is, or
altogether regret the whole idea. The "freeze" feature is a unique service.

When your Forex deal is running (you hold an "open position"), you can monitor
its status and check scenarios online, whenever you wish. You may change some
terms in the deal, or close it (and cash the profit, if any, or minimize the
loss, if any). Moreover, some companies let you determine a "take-profit" rate,
with which the deal will close automatically for you, when and if such rate
occurs in the market. Meaning: you do not have to stay near your computer when
you hold open positions.


Source : By Various Sources

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