FOREX, FOR-EX.. separated, and you would get the longer phrase “Foreign Exchange”.
FOREX was “born” in 1971 as an interbank, economic market when international trade evolved from fixed to floating exchange rates. This allowed market forces to act freely and fairly. Speaking of which, the currencies rates relative to each other are determined at a mutually agreed rate by all nations.
Instead of trying to bore you, the reader, with facts and figures that can be derived from any other websites, let me get to the gist of this article: Making money with currency trading.
– Capital. Like any others, FOREX is a form of investment which requires an initial sum of money from the investor. Set aside some handy cash for this.
– Trading account/ system. First of all, you need to sign up for a trading account with a financial services corporation. With the advent of the Internet, it is possible to trade online as well.
– Understand and Practice. Before even beginning, it it essential to comprehend technical terms & jargon, market conditions and anything that you are in for, as related to FOREX trading. Practice with a virtual account (with virtual money involved) before utilizing your own money. Both of which prepares you for the reality of the market, rather than you jumping into the fray blindly.
– Research and analysis. Your money will not work for you by just deciding ‘buying’ or ‘selling’ off-hand. This is where Technical Analysis (TA) and Fundamental Analysis (FA) comes in. Read up on economic news and global events that may affect the specific markets. Look, compare and analysis chart movements of currency pairs. After which, make your own judgment and go along with it.
– Emotions. There are never any sure-win strategies or trades. Indeed, losses are inevitable in trading. The most important thing is to win bigger than your losses. Analysis the basis of your losses, and think on how you could have made your win bigger. Do not let your emotions take control of you. Accept your losses, instead of escalating down a losing spiral with an initial wrong move.
Do not rush with currency trading! Many a times people have been burned badly in such a volatile market because they are not confident in their decisions, or do not have the guts to follow through their own judgments. They trade without first thinking seriously through, and involve themselves in a black hole.
Get your act together, and make money in FOREX trading!