Archive for October 2008
How do I acutally make money trading forex?
Forex follows the regualar mantra of business: you need to buy low and sell high to make money.
The amazing chance to make huge profits in the forex market come from the daily fluctuations in the currency exchange market.
As opposed to the stock market, no physical goods are purchased. So you aren’t ever buying physical currency, but are relying on contracts for the amount and exchange rate of currency pairs.
This potiential in day trading forex is that the every day changes in regular currency exchange markets (which hover close to 1%) are multiplied by 100!
Different forex brokers have different leverage ranges, so the leverage factor could be even higher!
The advantage of trading with forex: leverage
The main advantage of trading forex is it’s incredible potential for investing leverage.
Essentially, “leverage” is the ratio of investment to it’s actual value.
If you used $1,000 to buy a Forex contract with a $100,000 value, you are leveraging your money at a 1:100 ratio.
The $1,000 is all you risk at once, but you have the potential to make a whole lot more than that.
This is the amazing thing about investing in forex, because you can make a lot of money with a very small investment if you do it properly.
Posted in The Basics of Forex | 
Tags: forex leverage, how the forex market works, investing leverage, why trade forex