What is Forex – how to make money with forex

Posted by on June 11, 2011 in Making Money | 0 comments

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Q: What is Forex?

A: Foreign exchange trading is called Forex. Where traders buy one currency against another currency , Similar to buying stocks but instead of buying or selling a stock the trader buys or sells a currency against another currency mostly the US Dollar.

Q: How to make money from Forex?

A: When we buy one currency against another and the value of that currency goes higher we make money buy selling.

Q: What are PIPS?

A: Currencies are traded with the minimum of 4 decimal points , So 0.0001 would mean a pip in forex language. Example EUR/USD Price 1.4524 were 1 Euro is worth 1.4524 dollars.

Q: How can I trade Foreign exchange or Forex?

A: Mostly Foreign exchange or Forex is traded online. There are lots of Trading station to choose from.

Q: Whats a spread?

A: When trading forex market there is a difference between the buying and selling price, this is the spread in pips (see what are Pips). Forex market has some of the lowest spreads the spread between EUR/USD is as low as 0.9 pips.

Q: What is Leverage?

A: Leverage is a kind of borrowing money, in forex market the trading company usually gives it with a funded account. Leverage can vary from company to company somewhere from 1:50 to 1:400 , This means every dollar you put in the account you can buy 50 to 400 dollars worth of currency.

Q: How to know which currency is being bought?

A: The currency”s symbol that shows first in a pair is the currency bieng bought against the second one.

Example :

1. USD/CAD buying this pair means the US dollar was bought against the canadian dollar.

2. EUR/USD buying this pair means the Euro was bought against the US dollar.

Q: What is a margin call?

When your account balance reaches a certain low amount in your account all the live trades will be closed without your consent.

Q: What are the Risks for trading forex?

Q: Forex could be very risky investment if you have no idea about it. A good mentor does not advise people to invest money that they can”t afford to lose.

Q: Who is a Mentor?

A: In forex a mentor is a person who gives trading ideas, help us understand the markets and also gives latest market information.

Foreign exchange so called Forex is a way of making a living for may traders. Andrew Spanton is one of such traders. On the request of a few of his students, he has been kind enough to start a radio show to gives a market recap at the end of each trading day at 4 pm EST .

He also sends out market researches and update via emails to the people he mentors.

Written by — AJ

Warning

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

 

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