Want to know the biggest excuse people make for not trading currencies via Forex? They say they don’t have time. They complain that they already work 40+ hours a week. They won’t do it because they’re tired. Somebody bring me a violin for these whiners…
For the most part it doesn’t matter what’s going on in your life- there will be time to figure out how Forex works and how you’re going to make money like the pros in the currencies market. It just doesn’t take that much time to learn how to do this.
The first thing you need to learn is “Forex” refers to. The Forex market is nothing more than the biggest and most popular market for trading foreign currencies. TRILLIONS of dollars moves through this market, 24/7, and a lot of people want their piece.
Why is Forex so popular? Aside from the obvious (the aforementioned TRILLIONS of dollars being moved in the market) this currency market is totally liquid. It’s extremely easy to buy, to sell and to trade currencies in whatever volume you want whenever you want.
Liquidity in markets creates a highly volatile trading situation. You can make a ton of money overnight, and you can lose it twice as fast. Learning the fundamentals of the market will keep you from losing your shirt and opens up your potential profit limits.
Another factor why the Forex market is so popular- it’s open to anyone. You don’t need 100k or a million in the bank to get started trading currencies successfully. Begin with what you have, trade intelligently and triple your money quickly, then repeat with your new wealth, increasing it dramatically over and over again.
How can you make up to ten times your initial investment quickly? It’s simple and just leverages what’s called a margin account through a broker. Margin accounts are a little complicated, but all essentially they allow you to trade massive amounts of money when you only have a little bit to start with. If you want to trade $100k but you only have $1k to start with, then you just put together a 1% margin account.
This is what the pros do. They use margin accounts to leverage smaller amounts of money as if they were exponentially larger.
The pros use this high risk form of investing and then set up safeguards to make sure they don’t lose it all when things go counter to their plans. The most common way of doing this is by setting up a stop order which automatically protects your investment when you lose more than you’re comfortable with.
Stop orders are great because they automate your risk prevention. This is a good idea because most people FREAK OUT and sell their investments the second they run into losses much smaller than they can really afford to lose. Figure out your stop orders before you start losing money and get emotional about it.
All of these are tactics for currency trading, but at the heart currency trading only comes down to one thing, the one thing that all successful investing revolves around- buying assets low and later selling them high.