The Path to Money is Trading Forex
If you have been wondering what to invest in next and are not sure what exactly it is, then you should consider Forex trading. When you mention this word too many people, the first thing that comes to their minds is complicated charts, financial terms, and things that a layperson cannot comprehend. But, when you come to understand it, it may be easier than you think. In fact, it is one of the most lucrative fields you can invest. Before we get into Spot FX Trading, FX Arbitrage, FX Futures, Automated Forex or Trading the Ichimoku Kinko Hyo, remember doing currency trading is only taking advantage of price movements in forex quotes. It’s not as fancy as those forex pros have you think.
So what’s Forex? Also known as foreign exchange, currency trading, or FX, is a global market that is decentralised where all the world’s money are changed hands. This is vital to the entire economy because, through it, people can conduct overseas commerce and business. For instance, if you are a citizen of area A and want to buy a car from a person living in area B, you will have to exchange your money to that of area B for the transaction to be successful.
You may already be a Trader forex without already knowing. Yes, that’s right! Recall that time when you return from a vacation abroad with some extra Euros, USD Dollars or Yen? Well, imagine if, by the time you return from holiday, the value of those spare foreign currencies goes up in value? By taking advantage of the world currency exchange rate, you may have profited an extra 1 or 2% of your own country’s money. In essence, that is what happens in the fx game. You may be thinking that 1 or 2% profit may not be much and wonder can you make money with forex at all? Well, what happens in practice is that the fx professionals trade with large quantities with the help of gearing so that small percentage could amount to an enormous forex profit.
The reason why currencies are the largest and most liquid financial market in the world is the need to deal with different types of money. Furthermore, Forex dwarfs the Stock Exchange. As of February 2016, an average value of U.S $6 trillion is in exchange per day. For a broader understanding to currency trading, we recommend a good place to start is to Learn Currency Trading with Books
The forex market is unique in that, even though it is international, there is no centralised marketplace. Instead, the currencies are swapped electronically over-the-counter (OTC) via computer networks. Find out more about these electronic trading platforms in our article here. Unlike other financial markets such as the stock exchange, which are open for specified periods of time per day, the forex is open 24 hours, five and a half days a week. The currencies are circulated in the major financial centres worldwide across all time zones. These financial centres are Paris, Sydney, Singapore, Frankfurt, Hong Kong, Zurich, New York, Tokyo, and New York. Trading across all time zones ensures that even when the trading day ends in the U.S., the day in Hong Kong and Tokyo starts a new. Below are the answers to your question if you were asking yourself why you should invest in forex:
1. Hedge Against Political and Event Risk
Unlike some other investments, you have more control over the outcome of your investment in currency. This means you can avoid losses based on your tactical assessment of significant global events. Some of the global events that affect currency trading include tax changes, monetary policy changes, changes in top leadership, import restrictions and health-related epidemics, and new tariffs. Other affairs are wars, money re-valuations, political upheavals, recessions, and trade deficits.
2. Global Economic Investment Protection
You should also invest in forex because it is a global economic hedge. With forex, you can choose to invest in currencies based on your perception on how their relative value will change over time. You can decide to spread your risk across several currencies, therefore, making profits from changing macroeconomic conditions of those countries. Also, depending on which direction you perceive a particular currency may be heading, you can decide to bet both ways, either short or long.
3. Level Playing Field
Another advantage that the FX field has over other financial markets such as the stock exchange is the fact that information that influences changes in value is available on a real-time basis to everyone. Also unlike stocks, there are no insiders in the forex market. Everyone conducts his or her analysis of events that influence a country’s economic health, making individual choices.
4. Diversified Portfolio
You can take positions in fx to balance and expand your investment portfolio. In case you predict that the currency you have invested in will drop in the future, diversifying in other assets would be a sound move. Also, remember that the movement of currencies is from each other. This means that when one is dropping, another must be winning.
There is computer software used to do online FX. This software eliminates the need of interacting directly with forex brokers. Also, they can analyse forex charts and forex signals making investment decisions that are sound. In a nut-shell, FX software is capable of executing your positions instantly when opportunities arise, are ever vigilant for advantageous positions, logical, unemotional, and smart. Such software is designed to function without you being there by using either pre-set or already programmed parameters to scan the FX Exchange Market. For profitable currency dealings. With such software, all you need to do is switch on your computer, open the program, and do other things as the software does the buying and selling for you.
FX Software is simple to use and are suitable for novice, experienced and also the experts. When you purchase a particular forex dealing program, you can use its demo account to practice how betting on FX is done to gain some experience before investing your money. Below are some of the ways forex trading software facilitate forex trading:
1. Absentee Execution
You might already have a source of income, but you want to take up FX as a secondary one. Automated FX software will help you manage this. The software will perform some of the tasks such as watching for events that affect currency prices, analysing charts, or studying markets that you would be otherwise doing without it. Such software allows you to take some time off from the computer monitor and do some other things. The software scans the market, and when the elements are right, it makes the execution. To learn more about buying and selling fx with software be sure to check out Russ Horn’s FOREX Training Program
2. Variety of Software for Different Needs
There are different types of automated forex-dealing software on the market to perform multiple online currency conversions rather than having to scour the fx conversion rates yourself. They all have different programmability and ease of use, performance, and speed. Because people have different needs, a variety of software is good. You will be able to get software that has the features you need to make online investing easier and less risky to you. Here, at The Trading Reviews, we aim to evaluate the best software platforms for trading as well as the best Online FOREX brokers.