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Step 2: Setting up financial goals

What is Forex? An indepth look

Ever wanted to make money whenever and wherever you want? Start trading now and receive a 25 dollar welcome bonus

Forex definition

Forex is short for Foreign exchange. This market is the supply and demand of currencies. If you’ve ever traveled to a foreign country, you will exchange your currency to the one of the foreign country so you can pay for stuff. The price you pay for the other currency is the exchange price, which is determined by the Forex market.

Exchange price

The exchange price is the value of the currency in relationship to the other currency. If the exchange price is favorable to you, it means that your currency is more expensive than the one you are exchanging it to. This is where you can profit in this market.

So for example:

Let’s say you are French and you travel to America. You bring euros with you and want to exchange the euros into dollars. At the airport you go to the currency exchange and find out the rates. You see that euro to dollar rate is 1.1200 at the moment. This means 1 euro is worth 1.12 dollars at the time you are exchanging your money. So if you exchange 100 euros to dollars, you receive 112.00 dollars.

So how do you profit from this? Let’s take our previous example and let’s say that the euro to dollars rate has gone to 1.0000 the next day. So 1 euro is now worth 1 dollar. You still have 112.00 dollar and you exchange it back to euro. You now receive 112 euro. Hey, wait a second! You had only 100 euro when you first exchanged your money and now you have 112 euro. This means you have 12 euro of profit now. This is how you profit from the Forex market.

Bigger profits with online brokers

Now 12 euro isn’t much profit for the price you deposited. If you use a good online broker though, like the ones we suggest, you can get good leverage. With leverage, like explained earlier, you can make more profit than you deposit. So with only 10 bucks you can profit 30, 50 or even 100, but only if you trade well, and practice a lot. It’s not realistic that you can gain profits with no practice. With no practice and bad methods trading is risky!

Online brokers

In the trading world you can trade in currencies without traveling to a foreign country. You can do this with the help of online brokers. Doing this you can trade independently and profit in your comfortable home.

If you haven’t opened a trading account yet, you should do it now, because it might take a while before your registration is checked. You will also receive a welcome bonus, which you can use to practice our tips!

Big volumes

As I told you, the Forex market is big. That means the volume in which you will trade is also big.

For example:

  • The NYSE stock daily trading volume is about 25 billion dollars.
  • The Forex market has a daily trading volume of 1.5 trillion dollars.

Take a look at my graph here:

market-volumes-graph

As a conclusion, the Forex market is almost 60 times bigger. This means you can trade two dollars and make a hundred profit in only one minute, if you trade correctly.

Be aware though, this also means you can lose your money. Just be aware which broker you choose, because if you choose rightly, the broker you choose won’t let you lose more than your deposit. So play it smart and you can earn good money in the Forex market.

Just be sure to keep on reading our Forex guide, practice in demo, but also practice with real money. Practicing with real money is important, which I will explain in the section ‘how to practice’ later.

Step 4: Trading journal

Why trade in Forex?

Start trading now to receive a 25 dollar welcome bonus

Forex is one of the biggest trading markets in the world. You can participate in this market and profit very fast with very little. In this section we will explain to you how we trade in Forex and why you should start too.

If you haven’t opened a trading account yet, you can do it here and receive a welcome bonus, which you can use to practice our tips!

So why trade in Forex?

Forex is one of the biggest, if not, the biggest trading market of the world. This market is this big because everyone participates in it, including you, your mom and probably your neighbour. Any non-trader participates in it, because the Forex market is where you trade currencies. Every person who has exchanged their currency for money from a foreign country has (probably) unawarely traded in the Forex market. If you’ve ever traveled, you’ve probably exchanged your currency to a different one and when you engage in this transaction, you are actually trading in the Forex market.

Aside from the reason that a big market means bigger profits with small deposits. There are many more reasons why you should trade in Forex.

Increased interest

Interest in this market has increased, especially the last few years. This is because of the ability of trading online. Everyone can participate. That is why it has been decided that there should be supervision on this market from the SEC. This increases the trust in this market. More trust means more investors and this also means more profit.

Biggest market

So over the years the Forex market has become the biggest investing market in the world. Every day trillions of currencies is traded over the whole world. And the more trades, the more money you can make.

Working from home

Are you sitting in a dusty office where you do tasks for your boss, mindlessly? Imagine this instead: sitting at home or anywhere in the world with your laptop, making good money for a living. Whenever you want, however you want. Freedom.

What distinguishes the Forex market is that there isn’t a physical location for trading like the stock market. The Forex market is a ‘Over-The-Counter’ (OTC) market, this means that trading in this whole market is done electronically. So this is what enables you to work from home. A big reason to look into Forex. If you practice a lot you will be able to work from home.

If you haven’t opened a trading account yet, you should do it now, because it might take a while before your registration is checked. You will also receive a welcome bonus, which you can use to practice our tips!

While your registration is being checked, read on and we will explain to you how this big bad world works! So aside from being able to work from anywhere in the world, whenever you want, there are more reasons to become a Forex master.

Open 24 hours a day

The Forex market is also the ONLY market that is open 24 hours a day. The stock market is only open on work times from 9am to 5pm, but what makes this market so great is that it’s open 24 hours every workday. It’s only closed in the weekends, but that’s okay, after all the Forex excitement you will endure during the day, you will want off during the weekends.

What does this mean for you? You can trade any time you like. You can even work at a part time job and do this part time if you’d like. Complete freedom. Start whenever you want, quit whenever you want.

No commisions, mediator nor fixed quantities

Aside from the above advantages of this world, there are also no commisions, no mediators nor fixed quantities. This means it costs you less than the stock market as you can decide how you trade, and how much you trade. You can even start with only 10 dollar.

Low transaction costs

As if the list of advantages isn’t long enough. The transaction costs of your positions are also lower than the stock market, but this is ONLY the case if you choose the right online brokers. Which we can help you with, check out our online brokers page.

Less fraud

There is also less fraud in this market. Read about black swans in the stock market and you will understand.

So after reading these advantages, you should understand why we trade in Forex. Next in these sections I will explain some more about this market and also teach you how to trade in a well manner, because trading without knowledge is very risky. Keep that in mind. Skip to our how-to section here.

The best thing about the Forex market: leverage

Save the best for last: a different seduction of the Forex market is that you get leverage. Leverage makes it possible to trade with a small deposit as a big deposit, this is what makes it possible to profit well from a small deposit. Trading well, will prevent you from losing more than your deposit.

Example:

A online broker provides you with a leverage of 1:50. This means that your deposit of 50 dollar can buy or sell currency pairs for 2500 dollar.

If you haven’t opened a trading account yet, you should do it now, because it might take a while before your registration is checked. You will also receive a welcome bonus, which you can use to practice our tips!