What is Forex and how do you make money with Forex? It’s a question that many people want to know the answer to, and no wonder why! There are potential in Forex currency trading for making big sums of money in a matter of minuets.
For a beginner, Forex may seem like an impossible thing to understand. But, the truth is, Forex is actually quite easy to understand. When it comes to Forex, i am no expert by any means. I just know a little about Forex and how it works, mostly from research and readings i have done in the past couple of years. Since Forex is one of the least understood ways of making money online, and since i know there are a lot of beginners who want to learn Forex without having to pay somebody to teach them, or pay thousands of dollars to take a “Forex course”, i have decided to write a series of 7 articles about Forex, to help those who are interested in Forex trading, learn the basics of it.
Forex is made up of two words, Foreign and Exchange. It refers to exchanging foreign currencies, for a profit of course! How is that possible? Well, because of the economical and political happenings, rates of currencies change. It gives you an opportunity to make a profit by trading currencies based on their rates. That’s how Forex traders make money. of course, this means that it is risky, and there is possibility that you may lose your money.
Forex Traders Can Trade With Any Country
In many ways, Forex trading is a lot like stock exchange trading, but there are some game changing differences as well. One difference from stock exchange trading is that unlike stock traders, Forex traders are not limited to dealing in their own country. A Forex trader can trade any two currencies, at any time, any where. Which makes Forex market, an international market.
Forex Market Is Open 24 Hours A Day
That brings us to another major difference between stock exchange trading and foreign currency trading. As you know, there are different time zones in different parts of world, and since Forex market is an international market, to be possible for anyone from anywhere to trade at any time, forex market has to be open 24 hours a day.
In Forex Currencies Are Represented With 3 Letters
Just like stock exchange market that each company is represented with certain letters, In Forex, currencies are represented that way also. But, unlike stock exchange market that a company can be represented by any number of letters, in Forex market, currencies are represented by only 3 letters: USD for the US dollar, GBP for the British pound, EUR for the Euro, JPY for the Japanese Yen, CHF for the Swiss franc, CAD for the Canadian dollar, AUD for the Australian dollar, and so on.
How Exchange Rates Are Expressed
Another major thing about Forex is that, the exchange rate between two currencies, are expressed like this: USD/CHF 1.14. Which means to buy one US dollar you will have to spend 1.14 Swiss francs.
Trusted Forex Broker
Finding a trusted Forex broker or an investment management company is the first step and one of the most important one. Don’t take this step lightly. Scammers have been ripping off people for years. So, it is only wise to look around, and make sure you find someone who you can trust. Use forums and online groups to find out about how and where to find a trusted Forex broker.
Automated Forex Trading Software (Bot)
Since Forex is an international market and there are trades going on at any moment, and obviously you cant watch it 24 hours a day, it is a good idea to use an Automated Forex Trading Software (a bot). It can trade 24 hours a day according to rules that you set for it. And they usually come with a demo option for you to test the system and get to know how it works, before you let it trade with real money.