Forex trading is the buying and selling of foreign currency for profit. You will have experienced it when you are travelling and a currency will be weaker or stronger against another currency.
The primary players in the forex markets are the banks, large commercial corporations, hedge funds, large investment houses and a small portion are the retail traders - which is what I am. The market is really driven by the bigger players.
The currency prices move up and down daily and this is called a trend. A forex trader will follow the trends of a currency and set trades in play to profit from the rise and fall of the currency. Trends are caused by macro and micro economics and a level of people sentiment too.
The forex market trades about US$5 trillion a day and is one of the biggest industries out there. The general public don't really pay attention to the value and size of this market.
All retailer traders will have a brokerage account - which is like your bank account. You will deposit funds for the purpose of trading. Retailers also connect their brokerage account to a platform called Metatrader 4 which is an online global trading platform which shares all the currency pairs out there that are being traded.
There are a set of major pairs which primarily are currency pairs like EURUSD, USD/JPY, GBP/USD, and USD/CHF. These are the major players and most retail traders will have one or all these pairs in their trading portfolio.
Trading isn't a skill we can learn quickly it takes years to be a good trader. It takes a lot of testing of strategies, testing of your own mindset and testing of your ideas. The facts state that 90% of new traders will lose all their investment within the first 90 days of doing trading by themselves. There is a lot of educational material out there to help with trading and a number of FB groups too. My personal route with this topic has been to do automated trading first so that I could learn and earn as I go and not waste my investment.
Automated trading is using artificial intelligence and professional traders to set trades on your behalf. AI is used now by about 80% of traders these days as it helps reduce the emotional side of trading and allowing investors to get into trades when they are not at their computer. AI with trading basically means the technology look for a set of trends and markers which help decide if the technology will set the trade or not.
The forex marketing is open 24 hours a day, 5 days a week and you can trade in any market through an FCA registered broker and the MT4 app.
Risk management and leverage are also key concepts to learn and consider when you start out trading as this will determine the potential profit and the potential loss. I always air on the side of lowering my risk management and ensuring I only trade about 1-3% of my capital in my trade at any one time.
A great place to verify traders and their technologies is a website called 'Myfxbook.com - it’s a great site for reviewing profits, drawdowns, history and trades in play for traders you are looking at. Its a space to analyze , get answers and ask more questions. The automated service I use has a link on here to review to help see the statistics of the trading tool.
Those are some salient points. If your son is keen to trade manually - have a look at www.babypips.com - there is some education there and some learning too which I use. If automated trading is something, he wants to start with so you can learn and earn then I can help with that too - as that is what my platform uses.
There are some points - I hope I’ve been able to make a few things clear. If you have any questions - just ask. Or if anything above is confusing, then let me know.
Trading is a good career to have but it does require a lot of learning, skill growth, commitment and time but if you get it right then it could be a good option.
I started this journey July 2019 and I wish I had started it so much earlier - its the one career choice that I do feel I have control over and feel I could achieve more money abundance even in this pandemic....but like all things we need to test, check, test, check....
Mootz became known as “the million-dollar granny” for her remarkable success in forex trading. She has since become something of a role model for both women and the elderly entering the financial trading sphere for the first time.
Her story really is inspiring.
Forex (foreign exchange) refers to the foreign currency exchange market, the world’s largest financial trading market. Pass yourself as a forex expert with these buzz words:
•Bid – to buy
•Ask – to sell
•Liquidity – financial ease of transaction, i.e. cash
•Trading volume – the amount traded
•Bid/ask spread – the difference between the proposed buying price and the actual selling price
•OTC – over the counter
•Exchange rate – the difference between currency values; for instance, a Canadian dollar is valued at .86 of a US dollar
•Hedge funds – large mutual funds companies that control vast amounts of money and are able to manipulate the value of a currency through speculation
•Central bank – the national bank of a nation, which usually exerts control over the value of that currency
Forex trading is the investment in the currency of one nation. Multinational Corporations doing business across national boundaries find value in keeping their cash reserves in a variety of countries, and holding their funds in a myriad of ways. For example, a UK corporation may hold a percentage of its working capital in UK pounds, but if it does quite a bit of business in USA it may also maintain a percentage of its money in dollars, in US banks. Individual investors over the decades have discovered that there is profit to be made in investment and speculation in the currency markets.
Take the case during the 70’s when the German DM swung rapidly in value. It was worth anywhere from 1.2 marks to the US dollar to 3.5 US marks to the dollar. When the mark was worth 2.5 it was beneficial to spend dollars buying marks, since the mark would buy more goods or services at that rate. As the mark bottomed out 1.7 to the dollar there was less incentive.
Surprisingly, the forex market itself is not unified. One can find many small forex markets specializing in trading various currencies. The most commonly traded currencies in forex speculation are the US dollar, the Australian dollar, the British pound sterling, the Japanese yen, and the European Euro. Currency values vary depending on the market in which an investor is speculating, so there is really no such thing as a single, unified dollar rate, but instead there are multiple dollar rates, which vary according to the market where the trade is occurring.
The major cities in which trades occur include New York, London, and Tokyo. It’s a 24 hour process. When Asian trading ends, European trading commences, and when European trading ends, then American trading opens. Naturally, when American trading ends, it is time for Asian trading to open house once more… and so on.
Currently, the most actively traded currency is the US dollar, involved in 90% of all trades. This is followed by the Euro involved in 36% of all trades, then by the yen in 20% and the pound in 17%.
Our fastest rising currency in trade is the Euro, however the US dollar is still the favored anchor point-- and the currency watched so as to judge how others will react. Differences in value of currencies come from the current events. GDP growth, inflation dips, interest rate swings, budget and trade deficits, surpluses and other economic conditions all shift currency values. Investors, for this reason, follow the news very closely. There are 24 hour cable news channels and many web sites devoted to news that aid currency speculators.
The forex market is highly susceptible to rumors. In fact the central banks of countries frequently manipulated local currency value by sowing rumors about interest rate hikes and other economic propaganda that impacts the value of the domestic currency. When this news is false it is called a dirty float- and it dismays the market.
I serve people who want their money to work harder for them instead of it sitting in the bank.