I will not cheat, I have heard about the currency market long time ago. But I did not take it seriously, as well as most of you. Recently I’ve made some money with it, and can’t wait to share all the information I have with you. I hope, this information will help you to pay your debt, save some money for the future, or whatever you have on your financial to-do list.
For those, who still doesn’t know anything about currency trading, I clarify. It is not rocket science, it’s only the place, where people sell one currency and buy another. When you think, that USD will gain in value compared to the GBP, you will exchange your Pounds into Dollars. In the case of real strengthening of the USD, Yippee, you’ll be richer.
Yeah, that’s it! Also, you don’t need to be overqualified in this field or have a lot of money to start, and that is brilliant!
And now, attention, my friend! Read, learn, and you’ll get everything you need.
Let’s start from the definition. “Currency pairs” are detectors of the relation of two currencies to each other. Not very hard, isn’t it?
Go ahead. Proceeding from the fact that the word “pair” appears here, we can make a simple conclusion that we always look at two currencies and their relative value. The information about currency pairs is usually shown as EUR/USD = 1.09. That means 1 EUR equals 1.09 USD.
But there so many currencies in the world, which one to choose? Here is the list of the most traded ones:
- USD – US dollar
- EUR – Euro
- GBP – British pound sterling
- JPY – Japanese yen
- CHF – Swiss Franc
- SEK – Swedish krona
- AUD – Australian dollar
- CAD – Canadian dollar
These currencies provide more liquidity and it’s easier to find the trading information about them, so it’s better to start your trading career in this field.
That’s all? Not yet, my friend, not yet. Remember, that there are two price types – a bid price and an ask price. The first one shows the price that you will get if you sell the currency, and the second – the price that you will have to pay if you want to buy the currency. Evidently, the ask price will always exceed the bid price, because the dealers also want to eat.
The opening of this type of account will help you to trade with higher volumes. This means, that you can earn much more money, as well as loose it.
Why then is it interesting for us?
Because currency movements are quite small, about 1% of the price a day. Accordingly, even if you’ll take a vacation for some days, you won’t see the significant difference in the course. In these conditions, it takes a lot of time to earn a million from a hundred dollars. Fortunately, there are a lot of brokerage companies, that offer to open the margin accounts.
What exactly do they offer? A loan, my friend, a loan. They call it “leverage” and provide a huge range of it. 10:1, 50:1, even 100:1. That means, if you deposit $1000, you’ll be able to operate $10000, $50000 or even $100000.
In that case, you’ll earn not $10 per day, but $100, $500 or $1000. Not bad, yeah?
But here you need to be very careful, because you can also lose that money. This is very risky, but very rewarding at the same time.
“Risk” sounds not very good, but, in fact, it is not a bad item. If there is no risk, there won’t be a profit too. The secret of success is in the ability to manage that risk.
You know, Forex is comparatively not risky compared to other markets, especially if you know what are you doing.
Analyzing your activity is a first step towards achieving your goal. There are a lot of online tools, that will help you achieve that. And in general, online trading software is such fast developing, that a baby will be able to start trading soon. Today, unfortunately, we still have to understand economics to predict the direction of the currency move. We must orient ourselves in such areas, as GDP data, interest rates, monetary policies and geopolitical events. They all influence on the currency valuation, and its’ understanding will bring you a lot of money.
So, do you want to fill your wallet? For some reason it seems to me that YES.