Forex or FX is short form for Foreign Exchange, therefore forex trading refers to trading in foreign currencies, the simplest explanation is that forex is the exchange of one currency for another at a profit or loss for example exchanging the Dollar for the Pound Sterling and vice versa. Forex trading takes place in a market called the “Foreign Exchange Market” which is regulated by governments worldwide although the Online Forex Trading Market is currently unregulated.
Here are some amazing facts about the forex market:
It is the biggest and most liquid financial market world over, Yes it is even bigger than the stock market!
On average the forex market records about 5 Trillion US Dollars worth of transactions daily.
But do you know that even with these huge figures, there is no central market for forex trading! Most forex transactions take place over the internet and many people trade forex for a living. Large Corporations, Small Business, Governments and Individuals engage in forex trading and it has made quite a number of individuals Dollar millionaires. There are a lot of successful forex traders cashing out large sums yearly. Are you planning to venture into forex trading? Here are some information you might need.
Types of Forex Markets
There are three types of Forex Markets namely;
Spot Market: This is the largest forex market because it is the basis of the other two markets and is the market most people refer to as the Forex market. The spot market is the forex market where currencies are traded based on the prevailing price at that moment. The forex prices are determined automatically by the forces of demand and supply among other factors.
Forwards Market: Here, there is no trading of actual currencies, rather there are contracts representing certain currencies, specific prices are set and settements are made in the future. It is used by Large corporations and Governments.
Futures Market: This used to be the most popular foreign exchange market for FX traders because it is available to individual investors for longer time than the other two markets. Nowadays, it is mainly companies that trade in this market with forex contract agreements between two corporations. Companies trade in this market mainly to protect themselves against possible future foreign exchange rate surges.
How to make money with Forex Trading
There has been a lot of doubt regarding forex trading and it is quite justified because in the early stages of electronic forex transactions, a lot of scammers made away with many people’s life savings leaving them penniless, such people can beat you up if you talk about forex near them. However, forex is one of the best ways to make money online and there are people who have mastered forex trading and are making it really big, a lot of them have become millionaires. Forex trading is also similar to Bitcoin trading. You can make money with forex trading in two major ways namely:
1. Trading FX Yourself
This is cheaper but very time consuming and requires a lot of education on how to trade forex but if you are dedicated, you can learn quickly and start making cool cash with forex, you can also establish your forex trading company and start trading for people for a percentage of their profit. Thankfully, there are a number of forex trading platforms where you can learn to trade without using real money for free and then when you are well versed in trading, you can invest a little and grow.
2. Paying a Company to Trade Forex for You
This is easier and good for people who are working or have businesses and hence do not have time to trade forex by themselves, there are quite a number of good forex companies that offer good returns on investment from 10 percent profit and above.
Please take note that there are still a lot of scammers in the business so do due diligence before giving any forex trader or forex trading company your money. Find out from people who have used them before and avoid companies offering profits that look too good to be true such as double your investment in a month and so on. It is best to ask people who you trust who have forex trading companies they use to refer you.
Some of the top forex brokers include Oanda, Alpari, FXTM, InstaForex and Avatrade.
How to Learn Forex Trading
If you want to trade forex for yourself, you need to learn the techniques and master them. There are a number of forex trading platforms online offering free training such as Oanda,. All you need to do is to create a demo forex trading account and read good resources on forex, apply what you learn and see the effect. Demo accounts enable you do forex trading without any money and are the perfect way to learn how to trade forex.
Note that no matter how many books you read, experience still beats them all, so don’t jump into the real forex trading market without getting enough demo experience and when you finally jump in, don’t invest so much until you have gathered enough experience too.
Best Forex trading software and platforms online
There are quite a number of Forex trading software or Forex trading platforms as some call them. From the reviews of a number of Forex traders, these are the best, however don’t take my word for it, do more research and decide which is best for you.
It is one of the biggest forex trading platforms and is consistently ranked as one of the best too. It is well regulated, has great functionality, has competitive spreads and has very good customer service.
This Forex trading software is well regulated too, has okay customer service, offers good spreads and is quite easy to use.
It is also regulated, offers hybrid system, good customer service and good spreads. It is also one of the biggest forex brokers worldwide.
Most electronic Forex trading companies use the MetaTrader 4 software popularly known as MT4 due to its ease of use and numerous features.
Trading Forex Online requires a good laptop, fast internet connection and sometimes a Forex VPS (Virtual Private Server). At an advanced level of Forex trading, you can buy the best cheap Forex VPS from top companies such as MyFXBook.com, vpsserver.com and others you can find online.
Steve Edegbo is the team lead at Naijatechhub.com. Naijatechhub is a team of writers and researchers dedicated to providing the best up to date information on topics in Nigeria. If you need more information, kindly contact us.