Forex123 Make money with Forex Trading
Forex trading is a very liquid market involved in the buying and selling of one currency to exchange it for another. The market operates 24/7 and since the prices of currencies relative to each other fluctuate, a trader can make profits and losses based on these fluctuations.
Forex traders focus mainly on the seven major currencies – the U.S. Dollar (USD), the Euro (EUR), the British Pound (GBR), the Japanese Yen (JPY), the Swiss Franc (CHF), the Canadian Dollar (CAD), and the Australian Dollar (AUD). A forex transaction involves two currencies – one that the trader is willing to buy and another that the trader is willing to sell in exchange. For example, if the buying rate of 1 Euro is equal to 1.5025 U.S. Dollars, a trader with $100,000 U.S. Dollars buying Euros at this rate will end up with 66, 555.7404 Euros. If the buyer believes that the value of the U.S. Dollar will fall relative to the Euro in the future and he is right, he stands to gain a profit. In the example earlier, if the selling rate for 1 Euro becomes equal to 1.5029 U.S. Dollars, he will be able to sell his 66,555.7404 Euros back to 100,026.6222 U.S. Dollars.
You might be thinking that most individual traders do not have 100,000 U.S. Dollars to use in forex trading with a measly profit of about 26 dollars considering the risk taken in case the exchange rate goes the other way. However, the forex brokers allow leveraging of up to 200:1 – meaning, for an investment of 500 USD, a trader can use 100,000 USD to trade. In the example above, the profit is magnified: the 500 USD in investment had a 26 USD profit or around 5%. Since several fluctuations happen in a 24-hour period, an initial 500 USD can make a decent profit if AND ONLY IF the trader buys and sells at the correct time. Leveraging can also magnify the losses so it would be prudent not to dive immediately into Forex trading without knowing what you are getting into.
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Then of course, there are trading platforms like Forex123 that offer free demos on how trading will work using their platform which does the math for the investor. Forex trading bots are software that are programmed to monitor the trends among different currencies and make the buy and sell transactions for the trader automatically.