Often you’d hear people asking if you can make money out of forex. Which is the simplest answer I’ve ever given, YES!
Forex trading involves huge risks of capital loss and may not be suitable for everyone – with leverage the risks are multiplied putting your capital at a higher risk. However, the risks involved are equivalent to a very huge possible gain.
Why not join this exciting journey and get to interact with other traders and learn more about forex trading.
Why forex? It is a 2 way market – up or down, and the fun fact is, either way, you can still earn a profit.
An example using a currency pair, EUR/USD: If you believe EUR is gonna get stronger than USD, the best thing to do is go LONG (BUY) in this case it’s an upward movement.
if you believe on the contrary (EUR is gonna get weaker than USD) – go SHORT (SELL) in this case it’s a downward movement, either way, you still profit.
The market is open for you 24 hours a day, 5 days a week (Monday to Friday) – you could use a break on the weekend as the market closes. So get your device and internet connection ready, and start trading in the comfort of your own home.
This is the most liquid market around the globe, meaning during market hours you can open and close positions as you wish (buy or sell at any time). A brokerage, connect you to the market, hence it’s very important to find an honest and reliable broker. Your forex account is like a bank account, and thus it’s very important to know who’s hands(broker) are you trusting your money with.
With such a huge competition of different brokers – now in more than 90% of brokers, no trading commissions or other fees are paid – it’s absolutely free – and always wondered how brokers made their money, and it’s done through a spread.
In Forex, everyone is accommodated with flexible lot sizes. This gives an opportunity to a lot of traders who wish to place smaller trading volume, and thus depending on your equity – say you have $100 – you will be able to trade mini lots and if you had $1000 you would be able to trade both mini and standard lots.
mini lot (0.1 incremental lot volume)
standard lot (1 incremental lot volume)
Forex isn’t like any other market, you don’t need $100 000 to trade 1 standard lot, forex offers what’s called leverage – it allows you to trade 1 standard lot (100 000 units) with a small percentage of your equity (Usually referred to as Margin). Leverage comes with different ratios depending on your broker.
Still skeptical about Forex? Almost every broker offers a demo account for good practice, this involves no risks at all, but functions like a real account – you may download the MT5 / MT4 software, and create a free demo account.