Forex 101 – Make Money With Currency Trading Online for Beginners

Getting started in currency trading online can be a painstaking business. It is perhaps the freest market in that it is impossible to influence or and create trends.

Constantly fluctuating through external forces, such volatility has turned this market first created in the 1970’s into the worlds leading trading platform with over 3 Trillion traded daily.

Transactions in Foreign currencies are not centralized unlike the NYSE which therefore means they take place all over the globe via telecommunications. In almost every time zone a dealer will list all the prominent currencies. Once the investor has chosen his/her preferred currency to purchase, the dealer is advised and does so. Forty years ago prior to the Internet, dealers could only be found in house but now a majority operate online due to the surge in this home business.

Trading times operate from Sunday afternoon until Friday afternoon (00:00 GMT on Monday to 10:00 pm GMT on Friday), which depending on your timezone and market preference you are free to conduct currency trading online 24/5.

When starting out it is quite common to speculate on currency investire in borsa prices by obtaining a credit line. These are available to traders with as little as $500 which will vastly increase your potential gain or loss.

This is what’s known as Marginal trading, this is where you are simply trading borrowed capital. This is attractive as Forex investments can be made without no real money supply. By allowing the investor (yourself) to invest in much more with fewer transfer costs you have the opportunity to open bigger positions with smaller capital. Therefor you can conduct relatively grand transactions, cheaply and quickly with a minimal amount of capital.

“Lot”, as defined in marginal trading refers to roughly $100’000, a sum which can be obtained by placing down as little as 0.5% or $500. Let’s say you believe the US Dollar will go up against the Australian Dollar. You purchase the US Dollar with a 1% margin at the price of 1.49889 and open up a “Lot” and wait for the exchange rate to rise.

At some time in the near future your predictions become real and you close the position at 1.5050. You earn 61 pips or about $400. Therefore with an investment of $1000 you will have made 40%. In the course of a day exchange rates as an example fluctuate in the USD/AUD market between 60 to 90 pips.

When you’ve chosen to close the position of your deal, the sum deposit is returned to you plus whatever gain is credited or loss is debited from your account.

Therefore, if you’re new to Forex currency trading online it’s wise to invest in a package which isn’t one of those – wait for all the 4 Green Lights – to appear and then open your trade. Then,- wait for the 4 Red Lights – to appear and close your trade. All your doing is being a monkey pressing buttons on a piece of software which is probably not accredited.