earn money with Forex Trading

Forex Trading (Foreign Exchange Trading) is the practice of trading currencies from different currencies against each other. If, for example, Euro exchange rates were low and US Dollar exchange rates were high, a Forex trader might buy Euros whilst selling US Dollars at the same time, known as ‘going long’.

Forex trading is usually done through a broker, allowing you to place a trade on a pair of currencies which you expect to change in value. Buying 5000€ at a cost of £4000 might see the pound strengthen, meaning that your 5000€ is worth £4500 a year later, giving you a £500 return on your investment. Although banks have been Forex trading for years, amateur traders are now starting to invest their own money in this potentially lucrative market.

The most traded currencies, in decreasing order of popularity, are the US dollar, Euro, Japanese yen, Pound sterling, Australian dollar, Swiss franc, Canadian dollar, Hong Kong dollar, Swedish krona, and New Zealand dollar. The US dollar makes up the bulk of the trade, with almost 85% of trades containing this currency (out of 200%, as each trade involves two currencies).

Predicting the future fluctuation of currency is difficult to determine, with the political and economic climates giving good indications, as does the past history of a particular currency. With Forex markets opening and closing throughout the day, the worldwide trade is continuous. For example, when the Forex market closes in the United States, it is just opening in Tokyo and Hong Kong.

To summarise, big profits and returns can be made through Forex trading, but it requires a lot of experience and knowledge of the world’s financial markets before real returns can be realised. Like any form of market trading, Forex trading can be risky and you should be sure to understand the risks and potential pitfalls of Forex trading before you commit any money to your new venture.