How to make money in forex
There are still some who do not know what forex trading, so lets get into the basics on how to make money trading right away. Because that is what you really want to know, isn't it? This short introduction to forex trading and currency trading will give you an idea.
This blog provides general tips on currency trading as well as the latest news in forex trading.
Here are some links that can help you make money on forex:
- Start by choose a good online broker (we especially like easyMarkets)
- Learn forex and currency trading through faster social trading.
- To succeed in forex it is an advantage if you have knowledge of stock trading.
Basic information about Forex and currency trading
to start making money in forex trading, it can be parents to understand a little more about the background to all this. Therefore, we have compiled some of the most basic knowledge we think you should know about the foreign exchange market and how to adapt to this market in order to profit.
Here we explain a bit what forex trading is, how you can start making money in forex trading, and what are the most popular forex services.
Not interested in forex history? Skip first part of this article!
Brief History about Forex and currency market
Knowing a little about the history of the currency market is not even necessary to be successful with forex, but rather it is certainly interesting to know a little about the background of the market to trade in.
It all started with the formation of gold standard as the new monetary system in 1875. This was probably one of the most significant events in the foreign exchange market's history.
Eventually suit most countries in the world to the new gold standard. The country had in gold reserves to reflect the value of the total holdings of its currency.
1 World War I gold standard was a challenge, because the European countries did not have enough gold in exchange for their currencies. Thus began the countries to print money, so that they could complete major military projects on time.
However, the gold standard was reinstated after the First World War, but history repeated itself after 2 World War, and it was again started printing money.
In 1944 implemented Bretton Woods system, which replaced the gold standard. This system resulted in fixed exchange rates between currencies, and all currencies were measured against the U.S. dollar (USD). At that time the USD is the only currency that was backed by the country's gold reserves.
In 1971, the United States declared that they would no longer accept U.S. dollars in exchange for gold. This was also the Bretton Woods system down for the count, and the world now had no fixed measurement to measure their currencies against. The authorities in the world could begin to print money when needed.
Around 1976, the globally accepted that exchange had become fluent. That meant that if you exchanged 100 U.S. dollar against the euro today, would you risk getting back less or more U.S. dollars if you switched back the next day.
floating exchange rates was the start of currency trading and forex trading. Speculators in the forex market was born. One could now exchange currencies back and forth (ie buying and selling currencies) and achieve a profit, but at the same time there was also the risk of losing money.
In the years that followed were currency most prevalent among large corporations and banks. Moreover, the high costs associated with running the forex trading, which meant that the currency was not particularly prevalent among individuals.
Around 2000, the first serious forex trading services established on the Internet, and this would be a ticket to foreign exchange for ordinary people. The man and woman in the street could now speculate side by side of the big banks and the world's richest investors.
Today forex trading is becoming very prevalent among individuals. It is no longer expensive to trade currencies, and select the right online broker (not a bank but a specialized forex broker), the currency be significantly cheaper than such trading.
Have forex trading a socially useful value?
It is obviously useful for individuals who have the opportunity to make money on currency transactions. But like elsewhere, what exactly is the benefit in this market?
to understand the value of the market, we must know that forex trading involves transactions where one party purchasing a quantity of one currency by selling another currency (forex always consists of a simultaneous purchase and sale).
Forex traders are helping to maintain liquidity in world currencies, which is obviously very important. Just think when you are on vacation and want to use a different currency. For example, you exchange euros with dollars.
exchange market is decentralized and there is no single physical exchange or trading of currencies. Instead, there are buyers and sellers all over the world, from financial centers and local exchange offices, the forex brokers and other instutisjoner offering to exchange currency.
market for currency trading is open 24 hours a day, except on weekends. It is the foreign exchange market determines the value of a country's currency in relation to another country's currency.
reason why the foreign exchange market exists is to facilitate international trade and global investment. This is achieved by giving one party the ability to convert one currency to another.
forex market provides the opportunity for speculative trading, and that is exactly what ForexBloggen.com about: How to make money by trading currencies!
As traders, our philanthropic role limited to improve liquidity in the foreign exchange market, and so contributes to the Treasury through the capital tax (28% tax rate in foreign exchange, the same as in stock trading). If you are unlucky and lose money, it's a small consolation that you can deduct the loss of the tax.
Why start with forex trading?
goal of forex trading for us is the speculators to make money, but what exactly is the benefits of conducting this type of trading?
- You can trade from anywhere in the world, all you need is a computer, tablet or a modern mobile phone and internet access.
- huge trading volume, leading to high liquidity, which means it will be easier to get in and out of positions at the price you want.
- Flexible hours. The market is open 24 hours a day, 5 days a week.
- Margin trading is readily available, and greater opportunities for leverage than jeg stock market. Thus, you can raise returns without having to increase the investment.
- Fewer variables to consider than the stock market or commodity market.
- Unlike the stock market there is no bias in the market, which means that you have more opportunities to make money in both rising and falling markets.
- Easy and low start up costs.
Because benefits that the above is the foreign exchange market referred to as the market closest to the ideal of "perfect competition".
Many people doing forex trading
That it is popular to engage in foreign exchange trading is no exaggeration: According to BIS (Bank for International Settlements), the daily turnover in the foreign exchange market estimated at 3.98 trillion dollars.
Who trader forex
- large banks, central banks and financial institutions
- authorities in most countries
- Currency Speculators (that's us!)
- Institutional investors
- Tourists (alternate currency due. holiday pay)
Hottest currency to trade
Here are the most popular currencies traded in the currency market.
- USD - United States dollar (84.9%)
- EUR - Euro (39.1%)
- YEN - Japanese yen (19.0%)
- GBP - Pound Sterling (12.9%)
- AUD - Australian dollar (7.6%)
- CHF - Swiss franc (6.4%)
- CAD - Canadian dollar (5.3%)
- HKD - Hong Kong dollar (2.4%)
- SEK - Swedish Krona (2.2%)
- NZD - New Zealand (1.6%)
How is the exchange rate?
Exchange rates as mentioned liquid. Today there are constant changes in exchange rates. This means that the value of a dollar against the euro differs from one second to the next. All the time turns these courses up and down.
exchange rates determined by a number of factors, here are the essentials:
- economic factors. This includes policy decisions of governments and central banks, and economic conditions as they appear in the financial reports. Unemployment and consumer reports include essential factors.
- political conditions. International, national and regional political conditions can have a major impact on exchange rates.
- market psychology. In any financial market psychology is very crucial. Finally,'s really all economic variables expressed through a range of emotions that occur in the brains of players in the market.
- Algorithms. Electronic trading based on algorithms, such as robot trading has become increasingly popular and it is just as popular as the foreign exchange trading in the stock market. The results and effectiveness of these algorithms are important for how the exchange rates fluctuate from second to second (or actually be down to thousandths of a second when we talk about robot trading).
So what exactly is forex trading?
If you've read this far, so are you still interested in learning more about what forex trading is all about.
Forex trading relative to fit the individual traders and investors are hard to find, nothing more than speculation over the future exchange rate for a particular currency pair.
example, if you as a trader believes that the EUR / USD will go up, you might decide to buy EUR / USD in foreign exchange market. If you think the price will go down and you can shorting EUR / USD.
How to buy and sell currencies
All foreign exchange transactions conducted by individual traders must be performed via a currency broker (or forex broker). There are many to choose from, you can for example see this list of forex brokers.
It's hard to recommend just one forex broker, as there are many that offer great services, but there are many different commercial solutions that meet different needs.
Here are some of the most current forex brokers that you can use:
- easyMarkets is an awesome online broker specializing in Forex and CFD trading. You can in addition to trade currencies also engage in trading in stocks and foreign equities, commodities, indices and exchange-traded funds. Cheap and low spreads. Regulated by the UK Financial Supervision.
- eToro is one of the largest social investment networks on the internet. Their trading platform is significantly different from almost everything else. eToro focuses on social trading and currency trading. Select eToro if you want to see what other traders trades at any time, and you have the ability to find the best traders in their network on 2 million users, and then copy their actions in the market with a dedicated amount of money. A brilliant service and unlike anything else. eToro has made currency trading for something fun and easy.
- Easy-Forx has been one of the most popular forex broker pure online, and has been in operation longer than the people. This is still a very good forex broker that is cheap to use and offers everything you would expect of a good forex broker, such as high leverage and margin trading, shorting and trading platform with options for technical analysis.
The above online brokers are safe trade services operated by serious and regulated companies.
If you want to learn more about forex trading can be helpful to start by getting some practical experience. Start by registering a trading account with one of the proposed network mediate clean above. Start with a small amount that you can afford to lose if it goes wrong. You can always invest larger amounts later on, once you have found a profitable strategy to profit.