Forex trading is not a new term, Forex is as old as the history of money. But the question is what is Forex and how to make money with Forex trading. Forex is a technical knowledge and business of trading different currencies against each other. There are many people around the globe making money with Forex. Fortunately with the use of computers and internet Forex trading becomes much more easier than ever before. Your home will be your office, you just need to have a good internet connection and a computer to work on. Forex trading is one of make best way to make money online these days. You do not need to call any broker or referring any bank just sit at your computer and give a trade.
How can you trade?
There are many brokerage companies that allow you to do trade over the internet and on different software, they charge a small amount of fee from your earnings. For any trade when you make some money they will take their commission.
What you need to do now, you need to find a good, trust able and reliable trading platform, sign up with them. Fund your account and then use your money for trade. Any profit you make can be added to your account which you can withdraw with the given payment processors given at website.
Best Currencies for Forex Trading:
You can trade with any of your desiring currency pair or some other pairs like oil, metals and gold etc. But the these four currency pairs are very famous and use to make trade on. These four pairs are (GBP/USD), (EUR/USD),(USD/JPY) and (USD/CHF). In every currency pair first serve as the commodity and other works as money. For example if you are buying EUR/USD it means that you are buying Euro against USD and vice versa. But it does not matters which currency you have in your account, it can be automatically converted to the desiring trade. Your profit and loss will be added and subtracted respectively.
How to make money with Forex Trading:
Simple formula in forex is to buying on low cost and selling on high cost. But the question is which time is the best to buy or sell? How to go risk free? how to limit losses? Keep one thing in mind you can earn a very big amount from this business but you can also ran away your money in it. High risk high profit game.
There are two types of analysis which can be used to avoid loss or limit the loss. Technical and fundamental analysis.
In this type of analysis you can predict some parameters using graph history or some indicators software. I will discuss technical analysis later and will update here too. But before coming into the forex you need to have the basic knowledge of technical analysis. If you are a focused and a serious you can learn it easily. There are many sources over the internet which providing solutions to forex technicality.
Fundamental analysis is technique used to predict the value of any currency due its political and economical situation with respect to the world and the regular study of developed countries like USA, UK, France and Japan etc.
Fundamental analysis has a long term usage, but good traders can predict the sudden changes that happen after releasing an important news about the economic situation of an important country. For example when the news says that the economic situation of USA is improved for 5% in comparison to the last month, USD will become stronger and people start buying it. So the value of USD will go up because of the sudden demand increase. If you know the effect of the news on the price, you can take a proper position and make money. Of course there are two sides in this story which means if you take the wrong position, you will lose money.
Experienced and professional traders take the advantage of both technical and fundamental analysis whereas 99% of traders are dependent on the technical analysis.
I will also write on the best tips on forex, detailed technical and fundamental analysis.