What Currency Trading Is And What You Need To Do It Successfully
What exactly is currency trading? How does a currency trader
make money? In this short article we will briefly outline
the basics of currency trading (also called forex trading).
The concept behind currency trading is in fact very simple:
to a large extent it's not any different from trading in
commodities, stocks or even physical products such as
apples. You buy something at what you believe to be a good
price and then you set out to find a buyer that will buy it
from you at a higher price.
Where forex trading is different from trading e. G., in
potatoes, is that the currency markets can become extremely
volatile without any warning. If you buy a bag of potatoes
on the market and you know the retail price is 20% higher,
you can be virtually 100% sure you are going to sell your
bag of potatoes at a profit of 20%. Not so with currency
trading. The market can move in any direction without giving
Why would anybody in his right mind then get involved in
trading something on which you could lose money, you might
well ask. The reason is probably our human greed: even
though you stand to lose a lot of money, you could make much
more than with nearly any other form of investment in a short
time if things go your way. And of course traders have
developed all sorts of instruments to help them predict
where the market is going to minimize potential losses.
Your first step in becoming a currency trader would be to
open a trading account with one of the many online companies
that specialize in this. Try to get one with a free demo
account. This way you can experiment to your hearts content
with all the theories you have about how the market works,
without risking a cent of real money.
You should also be sure that the account includes access to
an easy to operate trading platform, preferably one with
integrated support for drawing charts and importing live
prices. Especially if you intend to be a day trader, you
simply can't do without having access to live prices. Swing
traders, trading in a longer time window, will not find that
Then your homework begins. You have to learn about things
such as technical indicators, fundamental indicators and
money management. You have to understand how to set up a
trading system and you have to stick to that trading system.
Don't get discouraged if all this sounds rather technical
and confusing. There are indeed a lot to learn, but if you
even want to be a professional trader, making serious money
with currency trading, you have to invest the time to get to
know the market.
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