Money made trading currencies

  Currencies are traded on a point or pip system. A pip is another word for a point in the currency trading arena. Traders are trying to capture points. Depending on the currency, each point is worth a different amount. For example; the British Pound is worth about $10 per point that is traded per lot. If you trade 1 lot and capture 40 points, you just made $400. If you trade 10 lots and capture 40 points, you just made $4,000.00, etc. 

Futures and FOREX?

Currencies are the money that represent the monetary system from different countries. For example; the Japanese Yen, Canadian dollar, Brazilian Real, Swiss Franc, etc. Futures trading of currencies is done in trading pits, where you are trading those currencies today, but for future prices. FOREX trading is trading actual currencies at today's exchange rate with banks. All trades are done through brokers or market makers.

What is a margin account?

Margin account is a bond account. It is like a savings account. Before you can trade, you need to place a certain amount of money in what is called a margin account. You are guaranteeing other traders that you can pay them if you lose. That account is overseen by your broker. He monitors your account when you trade. He usually will not allow you to risk more than what is in your margin account. The margin account exists so, as you win on a daily basis, they have a place to deposit your money. Conversely, when you lose, they have an account to withdraw the money. 

What is a Stop Loss order?

A stop loss order is an order type whereby an open position is automatically liquidated at a specific price. Often used to minimize exposure to losses if the market moves against an investor's position. As an example, if an investor is long USD at 156.27, they might wish to put in a stop loss order for 155.49, which would limit losses should the dollar depreciate, possibly below 155.49.

Easy Money

Easy money is also one of the most common reasons why people are attracted towards Forex market and trading. As seen on television or movies, they believe it easily when heroes turn into millionaires with just one bet.

Seeing along with it, how easy it is to trade, people want to become traders and invest whatever little they can afford, just to become rich easily.

Indeed it is easy to trade and the market is open for anyone who wants to come in and trade. But the main reason to enter into the market is to make money, an aspect of Forex trading which is not easy at all.

Making profits or accomplishing constant profits is a hard nut to crack in reality. It is something that needs and involves a lot of learning, persistence, restraint, dedication, and lots of other qualities, which are not that easy to keep up with.

What is Forex Market?

The biggest money market in the world, Foreign Exchange or Forex or FX is a platform where money is sold and bought freely between buyers and sellers. With over $1.5 trillion USD being traded daily, the foreign exchange market has now become a market which is open to trading by an average investor as much as it is open to a high investor. 

Launched over three decades back, in the early seventies, Market Forex introduced free exchange rates worldwide, according to which, the price of the currencies was determined on the basis of demand and supply only. No external regulatory authority was and still is, allowed to set or fix prices or rates. 

The power of setting or fixing a price for each currency is with the participants of the market, the buyers or the sellers, who decide the price of one currency against the other. 

Forex Market is also free and independent from all or any outside control and is open to all, as far as free and fair competition is concerned, making it the perfect market to invest in. 

Today, Forex market deals in over hundred times the every day trading done in the New York Stock Exchange. The Forex market is an over-the-counter market in which buyers and sellers trade through different means of communication such as telephone, fax or internet network rather than being physically present on the exchange location. 

The major reason for this is that contrasting to other money markets, the Foreign Exchange market neither has a physical location nor any central exchange. And it is this lack of physical exchange, which enables the Forex market to trades incessantly, 24 hours a day, going from one time zone to the other, from the world’s one major economic center to another, day after day. 

Beginning since 1997 till date, more than a trillion dollars of foreign exchange activity has been taking place at Forex, day after day. The every day forex trading quantity escalated from US$5 billion to US$1.5 trillion approximately. At this pace, it can be said for sure that the Forex market continues to grow at an exceptional rate. 

Going back to the time when Foreign Exchange market had been launched, before the Internet geared up its popularity, Forex was only limited to big companies, transnational or global banks and affluent corporate individuals, who could trade currencies in the market through the bank-owned trading systems. 

During that time, opening an account for trading required a deposit of as much as US$1 million. It was only with the advent of Internet and online technology, that today, investors can open an account as well as trade successfully, with only a few thousand dollars. 

Brokers are a significant part of this trading industry. It is only because of these Forex Brokers, that this Foreign Exchange market is a nonstop cash market, with a continuous buying and selling of currencies of different nations. 

Forex market conditions are highly unpredictable in nature and change every second, with fluctuation in price being the only constant factor in this trading. This is the main reason why, at times, Forex is also known as a highly fickle and fragile market. 

Forex today, provides a great substitute to the stock market trading for the traders and investors. Although Stock Exchange provides a far larger variety of stocks to trade in, Forex offers only a few major currencies to trade for, where in the US Dollar, Yen, British Pound, Swiss Franc, and Euro, are the most popular ones. 

Trading such big currencies is definitely more exciting for the investors than the stocks, and it can be seen that more and more traders and investors are now turning towards Currency trading to get the real thrill of the trading business.

Forex Day Trading Prospects

Compared to Equities or Futures, it can be easily said that the Forex market has several advantages and benefits. And Forex being a 24-hour market gives Currency trading the biggest advantage ever. 

With no external control and a market open to all, Forex is the perfect currency trading platform to invest in. with the power in the hands of the currency traders, to choose any time of day to trade, whenever they want to, Forex trading basically puts the traders or investors in charge of how they want to trade and how much as well. 

This is also because of the fact that Forex currency trading requires a very less amount of starting investment, which can easily enable a trader to open an account and start trading, unlike the cases in Stock Exchange and Futures market, where in, a fair amount of capital is required to start trading.

This facilitates trading for individuals or small traders, who can easily start trading small in the Forex market. 

Being a round the clock market, Forex day trading enables the investor to select any time to trade, whatever is more suitable to him/her. Allowing trading for 5 and a half days a week, 24 hours a day, provides Forex traders with incomparable freedom leaving the decision for currency trading in their hands, whenever they want to, and not when the market allows them. 

The Forex market is known as the Day Trading market because of the reason that basically, it trails the sun going around the world, and shifting from one main economic or banking center to another, starting from the United States to Australia, to New Zealand to the Far East, and towards Europe and then, again back to the United States. 

With Forex, all through a trading day, the currency trading volume on the whole is established by two factors, one being which markets are open, and second being the time when every one of these Forex markets partly overlap one another. 

The currency price at Forex day trading market, changes every second. One second a currency is up, the other second the other beats it to go high. Currency trading volume at Forex market remains high throughout, but it hits the highest point when the U.S, London and European markets are open, all at the same time, which only happens between the time periods of 1 p.m. to 4 p.m. by the GMT (Greenwich Mean Time). 

As compared to the high volume of the U.S market, the level of the Pacific border markets, Japan and Hong Kong for instance, is quite low, but this still provides a Forex investor the opportunity to study and explore the vastly traded markets and currencies of the Pacific Region. 

With more than $2 trillions of money being traded every day, Forex market is indisputably the biggest fiscal or financial market in the whole world. Here, the investors need to focus only on a few major currencies, rather than hundreds of equity or stocks. Forex market also is known for its fair costs and thin spreads. 

Furthermore, Forex market has high levels of liquidity as compared to any other financial market and this is what makes Currency trading market the biggest economic market in the whole world. This liquidity largely comes from the banks which provide liberal cash flow to individual investors, companies and trade houses. And since the Forex market is a 24 hour market, the currency exchange trading experiences superior liquidity around the clock, as compared to the stock market, which contains a limited time period for high liquidity. 

The instant trading through various means of communication such as phone and internet makes Forex day trading an instant trading business alongside making it a global trading platform. 

With such high levels of liquidity, round the clock trading and steady trading prospects, Forex currency exchange market is undoubtedly one of the most profitable and potential business sectors. 

Another basic benefit offered by the Forex market is that it is a no-commission market. With this free of commission trading, an investor gets to keep whole of the profit that he has earned through a day’s trading at the market. Keeping 100% of the profit is indeed a great deal for any trader today! 

Taking advice from proficiently experienced Forex brokers will get you standard features like 100:1 leverage and regulated FCM status along with commission-free trading, to make your trading experience more professional.