Forex 101.make money.
How
to make money with forex.If you have ever strolled down the ‘how to
make money’ street, you probvably heard of the foreign exchange market,
which is usually known as "forex" or "FX," . It is the largest financial
market in the world. Compared to the measly $22.4 billion a day volume
of the New York Stock Exchange, the foreign exchange market looks
absolutely huge with its $5 TRILLION a day trade
volume. Get this, the largest stock market in the world, the New York
Stock Exchange (NYSE), trades a volume of about $22.4 billion each day
and stock traders make a significant amount of money yet the forex
market trades $5 trillion. THAT IS AMAZING!
BUT! That huge $5 trillion number constitutes the whole entire global worldwide foreign exchange market. For us, retail traders, we trade the spot market and that's about $1.49 trillion. So you see, the forex market is definitely huge, but our piece of the pie as retail traders is not exactly the biggest picture out there.
History of Forex Market
Back then, the forex market was the private domain of hedge funds,global banks, multinational corporations and wealthy private investors in the world. All this changed some time back when the Internet-based technological wave of revolution of online trading spread like bush fire over to the forex markets. Today,thousands and thousands of individual ‘one man one computer’ the world over are discovering the excitement and also the challenges of being a forex trader of this era.
Caution
The forex markets sometimes can be the most volatile and fastest markets for one to ply their trade in. Trust me,money can be made in millions in a second and also on the flip side, money can be totally wiped out within the same second! Sometimes, currencies can display or show significant trends lasting several days and even weeks sometimes months and years. But why the forex market is deemed better is because the market is always moving hence providing a trader with an accessible and target rich environment to trade in.
There is money to be made and also there is money to be lost. As a matter of fact, statistics show that 90% of traders lose their money. But then you ask yourself,why would I want to trade forex if its only the lions in the game who get the money? The difference is that those who lose money most of the time are not sufficiently informed, did not invest time into their forex education, those who are greedy and those who trade with a gun on their heads, not literally.
Being a newbie, the shocking statistics and tons of failure stories weighing as much as the titanic scares one down the spine. In contrast to stock markets which are more common and relatively intuitive to most investors, the forex market somehow remains more elusive and seemingly complicated if not rock hard to newbies.
Most people, especially newcomers usually come into the game thinking that they have a sleek trick or two up their sleeve and try to beat the market. One month later and a margin call from your broker and an empty account,they become the statistic. You know, the 90% crowd who lose money. Don’t be one of them. Trust me, you don’t want to be the member of the 90% club!
Important!
Something important to note is that trading foreign currencies is a challenging and potentially profitable opportunity for educated and experienced investors. Before deciding to participate in the forex market you should carefully consider your investment objectives , levels of experience and risk appetite. And the most important part is don’t trade with money you cant afford to lose. The leveraged nature of forex trading means that any market movement will have an equally proportional effect on your deposited funds; this dear trader may work against or for you There are some strategies that you can use to prevent being wiped out drastic market movementslike stop-loss or limit orders. Any off-exchange foreign exchange transaction involves considerable exposure to risk including leverage, creditworthiness, limited regulatory protection and market volatility that may affect the prices or liquidity of a currency. Also using the internet in trading involves a lot of risk like issues with the internet connection and issues with the software.
Speculating and Gambling.
Trading the fx market is speculating. As a retail trader,you are a speculator. One thing to keep in mind is that there is a big difference between speculating-what we do and gambling-which is a big no no. gambling is about playing with money even when you know the odds are heavily stacked against you. So you take a chance. You hope. Trust me you would not last a day in the market with that attitude. Much cannot be ever said between the difference between the two to be enough so I will revisit that later.
Speculating and Investing.
Another important thing to note is that speculating is not investing! Shocked? Well its not. Investing is about minimizing risk and maximizing returns usually over a longer period of time months or sometimes years. Speculating is about taking calculated financial risks to seek a profitable return usually over a short period of time usually minutes, or hours. Speculating as an enterprise refers to treating or taking your trading very seriously. It is a business an every business needs serious attention and also work. hard work.
A successful retail trader or in order to be successful, one needs the following qualities:
1.Perseverance- one is going to have to persevere and be patient because you will get many trials, tribulations and temptations like you have never seen before. Losses are a daily dose in this game and you will have no other choice but to persevere.
2.Resources- one is going to need resources in order to partake in this speculative activity. One will need a computer with good internet connection and also finances the lowest sensible level being $100 dollars.
3.Decisiveness- one is going to be making a lot of decisions during their time as a trader and though some may not be life threatening, they definitely are account threatening.
4.Discipline- one is going to need to be very disciplined and stick to their trading plans and every other goal that they have set out to achieve.
5.Dedication- one must be dedicated and put in their all, time and energy if they want to succeed.
6.Knowledgeable- this is the most important trait you will need as a trader. You must always have knowledge of what is going on. You must always be updated on the activities and events occurring in the world. This is important when it comes to the fundamental part of trading which we will talk about later.
BUT! That huge $5 trillion number constitutes the whole entire global worldwide foreign exchange market. For us, retail traders, we trade the spot market and that's about $1.49 trillion. So you see, the forex market is definitely huge, but our piece of the pie as retail traders is not exactly the biggest picture out there.
History of Forex Market
Back then, the forex market was the private domain of hedge funds,global banks, multinational corporations and wealthy private investors in the world. All this changed some time back when the Internet-based technological wave of revolution of online trading spread like bush fire over to the forex markets. Today,thousands and thousands of individual ‘one man one computer’ the world over are discovering the excitement and also the challenges of being a forex trader of this era.
Caution
The forex markets sometimes can be the most volatile and fastest markets for one to ply their trade in. Trust me,money can be made in millions in a second and also on the flip side, money can be totally wiped out within the same second! Sometimes, currencies can display or show significant trends lasting several days and even weeks sometimes months and years. But why the forex market is deemed better is because the market is always moving hence providing a trader with an accessible and target rich environment to trade in.
There is money to be made and also there is money to be lost. As a matter of fact, statistics show that 90% of traders lose their money. But then you ask yourself,why would I want to trade forex if its only the lions in the game who get the money? The difference is that those who lose money most of the time are not sufficiently informed, did not invest time into their forex education, those who are greedy and those who trade with a gun on their heads, not literally.
Being a newbie, the shocking statistics and tons of failure stories weighing as much as the titanic scares one down the spine. In contrast to stock markets which are more common and relatively intuitive to most investors, the forex market somehow remains more elusive and seemingly complicated if not rock hard to newbies.
Most people, especially newcomers usually come into the game thinking that they have a sleek trick or two up their sleeve and try to beat the market. One month later and a margin call from your broker and an empty account,they become the statistic. You know, the 90% crowd who lose money. Don’t be one of them. Trust me, you don’t want to be the member of the 90% club!
Important!
Something important to note is that trading foreign currencies is a challenging and potentially profitable opportunity for educated and experienced investors. Before deciding to participate in the forex market you should carefully consider your investment objectives , levels of experience and risk appetite. And the most important part is don’t trade with money you cant afford to lose. The leveraged nature of forex trading means that any market movement will have an equally proportional effect on your deposited funds; this dear trader may work against or for you There are some strategies that you can use to prevent being wiped out drastic market movementslike stop-loss or limit orders. Any off-exchange foreign exchange transaction involves considerable exposure to risk including leverage, creditworthiness, limited regulatory protection and market volatility that may affect the prices or liquidity of a currency. Also using the internet in trading involves a lot of risk like issues with the internet connection and issues with the software.
Speculating and Gambling.
Trading the fx market is speculating. As a retail trader,you are a speculator. One thing to keep in mind is that there is a big difference between speculating-what we do and gambling-which is a big no no. gambling is about playing with money even when you know the odds are heavily stacked against you. So you take a chance. You hope. Trust me you would not last a day in the market with that attitude. Much cannot be ever said between the difference between the two to be enough so I will revisit that later.
Speculating and Investing.
Another important thing to note is that speculating is not investing! Shocked? Well its not. Investing is about minimizing risk and maximizing returns usually over a longer period of time months or sometimes years. Speculating is about taking calculated financial risks to seek a profitable return usually over a short period of time usually minutes, or hours. Speculating as an enterprise refers to treating or taking your trading very seriously. It is a business an every business needs serious attention and also work. hard work.
A successful retail trader or in order to be successful, one needs the following qualities:
1.Perseverance- one is going to have to persevere and be patient because you will get many trials, tribulations and temptations like you have never seen before. Losses are a daily dose in this game and you will have no other choice but to persevere.
2.Resources- one is going to need resources in order to partake in this speculative activity. One will need a computer with good internet connection and also finances the lowest sensible level being $100 dollars.
3.Decisiveness- one is going to be making a lot of decisions during their time as a trader and though some may not be life threatening, they definitely are account threatening.
4.Discipline- one is going to need to be very disciplined and stick to their trading plans and every other goal that they have set out to achieve.
5.Dedication- one must be dedicated and put in their all, time and energy if they want to succeed.
6.Knowledgeable- this is the most important trait you will need as a trader. You must always have knowledge of what is going on. You must always be updated on the activities and events occurring in the world. This is important when it comes to the fundamental part of trading which we will talk about later.
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