Foreign exchange (forex) is a market where all currencies of the world can be traded without boundaries. That is not to say that the forex market is a mall or a central place where buying and selling of currency happens, it is actually a global online space or platform which provides access to banks, government, individuals or traders to trade and exchange currency while making profits or losses from their trades depending on the existing currency rate. In a lay man's term forex trading is simply the prediction of the rise and fall of currency strengths against each other while acquiring and selling for the purpose of profit making.
CAN ONE EARN FROM FOREX
Yes! Earning from the forex market is a thing any individual or group can do provided he understands how forex trading works. To earn in forex trading one can predict the rise and fall of currencies against each other and make money from it if he invests and it turns out to be so. For example a trader predicting the rise of the Naira against the dollar in a NGN/USD quote thereby purchasing more Naira currency while it's cheap and selling it later when it's expensive for the aim of making profit.
Since the forex market is a highly volatile market, it is easy for one to earn either through short term (day trading) or long term trades. The first step to earning is to understand how the market works i.e. studying existed and existing trends and patterns, finding a good broker to help you out, using demo accounts to test out your skills, testing the waters by investing little when you want to go live and then planning and executing wisely.
BENEFITS OF FOREX TRADING
Forex trading brings about interest through the unsteady currency conditions in the market. It is this rise and fall in currency strengths that provides the opportunity for people to make money through prediction of trends.
The forex market is easily accessible to anyone notwithstanding whether the trader has huge capital or little capital, so therefore providing an opportunity for everyone ready to trade in the market to transact without having financial difficulties.
Lastly, since there is constant supply and demand for money in the forex market, an all day round means of making money is obtainable without limitations of locations or time. In addition to this technological advancement has brought the forex market to the doorstep of everyone where all that remains is for the individual to adapt to the opening hours of the market and acquire suitable software's developed to help in making day to day forex transaction easier for traders.
In conclusion there is every tendency to earn big in the forex market but caution should also be employed since the one thing which is the source of gain in the market is also responsible for losses and that is the unsteadiness or volatility of the forex market.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.