Anyone who has been on a foreign holiday and seen all the many foreign-exchange services clustered around tourist hotspots knows there’s money to be made in trading money. In fact, the global foreign exchange market, or Forex for short, is the biggest financial market there is. Altogether, this thriving arena of buying and selling currencies is worth around $3.2 trillion.
Can you get a piece of the action, trading Forex from your office or home? The answer may surprise, because the truth is, you don’t need to be a financial whizz to understand how the market works and how to profit from it. After some instruction in the mechanics of the market and what to do, you’re ready to take off with some Forex trading strategies that will hopefully pay off.
We’ve all heard the big stories about how major players in the Forex markets have hit the jackpot. One of the biggest in recent times has been the Billion-Dollar Day of Hungarian-American investor George Soros. In 1992, he bet against the British pound and made more than a fortune in just 24 hours. No-one is suggesting that the average Forex trader is going to have anything close to that kind of wild success, but with some careful planning and attention, there is certainly money to be made.
Getting into the Forex Market
So what’s the difference between trading foreign currencies and stocks and shares? On the most basic level, the way of going about it is the same as in any other market. But with Forex, trades are done in pairs. You get buying and selling prices for two currencies at one time, just as you do at the foreign tourist resort when you’re changing pounds into euros or anything else (and the bureau pockets the difference in price, as well as possibly charging commission).
But the Forex markets are far more accessible to the average person who wants to trade from home or their office to boost their income. That’s because you decide when to trade, as it’s 24-hour trading and not subjected to the fixed hours of the stock markets. Also, the majority of firms don’t charge commission, so Forex traders just pay for the bids or ask spreads. Plus, you don’t have to tear your hair out trying to figure out which of the many thousands of stocks to research and focus on, because with Forex, you can just choose a few currencies and follow their ups and downs in the market.
Equally importantly for Forex trading strategies is that for the average person, you don’t need a lot of money to get started. There’s no need to come up with tens of thousands of pounds the way you might have to with stock market investing, as you can get your Forex trading strategy under way with relatively small sums. As with everything, however, there is risk involved, and it certainly pays to have some basic knowledge or training beforehand, so you stand the best possible chance of minimising potential losses.
Clear and Straightforward Forex Trading
One thing that puts many people off considering trading Forex part-time is what they think is the level of complexity involved. After all, the typical view of the Forex trader, whether operating in a large financial firm or at home, is one of them surrounded by an array of screens displaying all manner of puzzling graphs, tickers, and charts. That may work for the huge institutional investors and traders, but for most people, simplicity is key.
That means only focusing on the information that’s relevant to the currencies you’re interested in and not being sidetracked by all sorts of metrics and additional information. At the outset, adopting careful Forex trading strategies is essential, as it takes time to build up knowledge and experience in this fast-paced trading space.
Always keep in mind, if you want to succeed and make money in the Forex market, that it’s not some get-rich-quick scheme, but an exercise in long-term planning and decision-making. Knowing when to get in and out of a trade is something that takes time, and adopting this approach will better position you to win.