What is Forex? Learning the market
that can make you a fortune
You have probably heard people talking about this huge money-making opportunity called Forex trading, but what is Forex?
Forex as a word is obtained from 'Foreign Exchange' and is quite simply trading one countries currency for another. In fact you have more than likely already taken part in Forex trading at it's most simplist forms.
Never traded Forex before? You might be surprised
 When you last travelled to a foreign country you no doubt bought some currency for the country you travelled to.
For example you may have travelled from the US to Europe in which case you would have paid US dollars to get some Euros.
At this point you may have shopped around, checking currency exchange rates at different banks before you actually completed the transaction. This is Forex trading at a very basic level.
Trading Forex online is, in essence, the same as when you buy currencies to go to a foreign country. The difference in online Forex trading though, is that you are not physically buying a currency.
Forex trading can be kept at a simple level and still be profitable
You are simply putting some money to one side and saying "I bet that I will soon be able to buy more Euros for my US dollar amount then I can at the moment". In other words you are saying that you believe the US dollar will increase in value against the Euro.
Let us show you that in a numerical example:
You have $1,000 US dollars which at the current exchange rate is worth 680 Euros ($1 US dollar = 0.68 Euros). You open a trade where you buy US dollars against the Euro.
In 5 days the US dollar grows in value whilst the Euro weakens. At this point your $1,000 US dollars are now worth 900 Euros ($1 US dollar = 0.90 Euros).
You could now close the trade and you would have made a profit of 220 Euros (amost $245 US dollars).
(Currency values are fictional for the bases of the example)
Forex trading offers the biggest profit potential of all markets
 Currency Exchange trading (Forex) first came about in the early 1970's, initially it was just major banks and institutions that were involved.
Now, thanks to the Internet, Forex trading has become accessible to private individuals like you.
You may have looked at the example above and thought "But I don't have $1,000 to trade with!".
Well, thats ok because any good broker will offer you a leverage (perhaps as much as 200:1) which means your one dollar can be worth up to $200 for the pruposes of trading.
Find out which brokers offer leverages of 200:1 and low $50 deposits
This, combined with the fact that the Forex market is as near to a perfect market as you can get (in terms of freedom and no external control) gives Forex trading the potential to be the most profitable market you ever become involved in.
Click here to find out more about how you can make money in Forex |
