”Forex” stands for foreign exchange; it’s also known as FX. Forex trading is an interesting and profitable pursuit. Simply put, it is just the exchange of a pair of currencies, one at a time. The rule that applies to all profitable transactions applies here too, ‘buy low, and sell high’. You buy a currency that you think will appreciate in value and you sell it when it does. It’s a barter system of currency, in which you exchange currency of one type for another with the intention of profiting from the transaction sooner or later. Forex is so flexible; you can make money in any market, whether the currency is going up or down. The price fluctuations are nominal, measured by very small increments know as pips (percentage in point). Profits are measured in terms of pips. For the EUR/USD pair, 1 pip=.0001. Hence if EUR/USD increases by 1% it would mean an increase of 100pips. That’s why most traders control 50,000 – 100,000 lot sizes of currency with as little as $500-$1000 in capital within their account.
With an average daily turnover of US$3.2 trillion, forex is the most traded market in the world. Unlike other financial markets, investors can respond immediately to currency fluctuations, whenever they occur – day or night. A true 24-hour market from Sunday 5 PM ET to Friday 5 PM ET, trading begins in Sydney, and moves around the globe as the business day begins, first to Tokyo, London, and New York.
Forex trading can be a great investment no matter which direction you trade and currencies rise and fall daily. The volatility is apparent the first time you trade and the changes in the Forex market are affected by everything from economic turmoil in Europe to political changes in the United States. The volume is at it greatest when the London markets start and you can make a tidy profit with some simple trades in less than a couple hours a day. In the stock market they would call that day trading, and would put a minimum $25,000 deposit restriction on your account for buying and selling in the same day. Not so in forex, you’re allowed as many trades as your capital will allow. This is why many traders use Forex software. Forex software will trade for you 24 hours a day, when you can’t. This allows you to make many smaller, less risky trades each day. Minimizing your risk and maximizing your profits, with volume trading you just could not do yourself due to work, spending time with family and friends, sleeping, ect.
There really is nothing more lucrative for the average investor looking to make a lot with a small to medium account size. The Forex market is readily available 6 days a week and its liquidity keeps your money working for you, not someone else. The flexible hours, the high leverage, and the ability to make a good profit in a few short hours per day makes forex trading the only sensible investment option for the small to medium trader. Start today.