Forex is a trendy word. Today, millions of people call themselves online traders. They use platforms and mobile apps to connect to financial markets through the internet. Every day, the foreign exchange sees colossal volumes — on average, up to 6 trillion US dollars circulates there daily. But how can a retail trader make money?
People have been exchanging currencies since the dawn of international trade. Gradually, humanity transitioned from barter to coins to the gold standard, and eventually to free-floating rates. Now, all currencies gain or lose value all the time. They are affected by economics and politics. For example, a drop in oil prices causes the currencies of exporters to dwindle.
Traders predict such changes and capitalize on the ensuing market trends. When you trade in forex, you monetize foresight; there are dozens of currency combinations: Major, Minor, and Exotic. For example, if you keep track of the European and American economies, you may profit from buying and selling EUR/USD.
All currencies are traded in pairs, and any pair can bring profit if you know its logic. Moreover, you can earn money if the instrument rises or falls — through long and short positions. It is an essential advantage of the market in comparison to other tools.
Arsenal of a Trader
Trading terminals fall into three distinct categories. There is software for PCs and laptops, accompanied by web-based platforms and mobile apps. Thus, you can trade using your tablet or smartphone, regardless of your location.
The Forex market rarely sleeps, as it is open five full days a week. To work in it, one needs four things:
- the right software,
- reliable brokerage,
- analytical skills, and
- knowledge of software systems.
To use the software, you need to register an account. Beginners start with demo accounts which are free and allow the riskless practice. Live traders work in the actual OTC market. The broker connects them to liquidity providers so they can make real money.
Everyone should start with a demo, as live trading always feels different. This way, you can first explore all the features and tools of your software. Still, when real money comes into play, the experience is always more demanding.
Reliable forex brokers offer free educational opportunities — these include demo accounts, articles, tutorials, podcasts, etc. Some companies allow you to trade with a free bonus. Others lower the entry threshold to just $10. Overall, access is affordable and effortless. The really demanding part is education, as you need to learn several systems of market analysis.
Currency traders are proud of their job and accomplishment. Their personal income depends on their skills and talents. Therefore, profit gives an undeniable sense of achievement.
Traders enjoy the freedom of working whenever they like, and structuring their own strategy. They are the masters of their own careers. Knowledge and insightfulness allow them to succeed in the largest financial market in the world.