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Forex – A Fast Way to Make a Few Bucks.
Some background: The Forex began in the 1970s with the introduction of free exchange rates and floating currencies. It’s the open market where the world’s currencies are exchanged and traded with few regulations. Because of the open nature of the market nearly anyone can trade and make money. The volume of trading and the enormous number of players make it almost impossible for any one trader to manipulate the market. The Forex is open 24 hours a day, from Sunday evening to Friday evening, and there are always trades to be had. This makes it one of the most liquid and constantly moving markets in the world Even though most transactions are made in lots of 100,000, marginal trading allows traders to start trading with an investment of as little as $250-500. Marginal Trading Marginal trading is both what makes trading on the foreign exchange market so possibly profitable – and its biggest risk. In a nutshell, trading on the margin is simply trading with borrowed capital. Depending on your dealer, you can purchase $100,000 worth of currency for as little as $500. If your trades are on target, you make a profit on the entire $100,000 lot – minus dealer commission, of course. If, on the other hand, your trade ends up losing you money, you could end up being liable for far more than the $500 you originally invested. That’s why one of the strongest bits of advice you’ll hear from most experienced forex traders is ‘Keep your eye on the margin’ – or even more strongly, ‘Don’t ever trade on the margin’. Here are some other important tips to keep in mind from forex traders on how to make quick money on the forex. Buy low, sell high. That sounds like a ‘doh!’ moment, but there are many people who forget that the market runs in patterns of dips and rises. Keep your eye on the pattern and buy when the exchange rate dips, then sell when it peaks. Be prepared to cut your losses. No one, no matter what they tell you, has a 100% profitable system. What they do have is the knowledge to get out of a trade before it goes further south. If you make a trade that decreases in value, decide ahead of time how much you can afford to lose. When you reach that low, sell. Don’t hang on ‘in case it turns around’. Know the situation in the country whose currency you’re trading. The economy and politics of a country have a profound effect on the exchange rate of its currency. Keep your ear to the ground and be prepared to move based on what you hear – because everyone else will. Pick a system that works for you. System is what it’s all about, according to traders who make money in the market. A system helps you decide in advance exactly how much you can afford to lose, and set stop/sell or buy orders based on those figures. Pick a system, live your system, and don’t second-guess your system. Always keep in mind the bottom line. Especially if you’re day trading, you’ll find that you lose at least as often as you win – but you can still come out ahead if you plan your strategy and system out in advance. By deciding in advance how much you can afford to lose in a trade, and when you should take your profits and cut them loose, you’ll make a profit even when most of your trades are losers. Finally, take the time to EDUCATE YOURSELF before you jump in with both feet. Forex trading is like any other business. You can’t make money if you don’t know what you’re doing. Study, read and practice – then go out there and make some money. Wake Up Richer Every Morning... Instant Internet Business Makes Money Automatically... Thomas Hunter is an Internet marketer, author and publisher and has helped hundreds of people become successful Niche Marketers. Explore the highly profitable world of Niche Marketing at http://SixFigureNiches.com our popular website. Article Source: http://netsalesinc.com If you have a website or ezine you may freely post this article on your site as long as you include the full resource box above. All links must be active / clickable with no syntax changes.
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