subject: Do You Want To Make Money In The Forex Market? [print this page] FOREX market refers to FOReign EXchange market. This is a worldwide, over-the-counter market for trading of currencies i.e. different currencies of different countries are bought and sold using this market. When you are trading forex, you are buying one currency using another.
Because of its over-the-counter nature, this is one of the easiest ways to make money onlineby running a business as you can make money at minimal cost without having to worry about advertisement, creating a workforce, finding a workplace or even gathering a large principal. Yet it is also one of the hardest ways to make a profit because of the market risks and unpredictability that one has to encounter while trading with this market.
Overview
In this market, you deal with currency pairs. There are four main currency pairs in forex market namely the British Pound and US Dollar (GBP/USD), Euro and US Dollar (EUR/USD), USD and Japanese Yen (USD/JPY) and USD and Swiss Frank (USD/CHF). If you want to trade with any other currency its also possible but let me come to that later.
Firstly what you need to know is that when you are working with any of these pairs, you have to assume that the first of these are the commodity while the second are the money and you work as if you were buying the commodity in exchange for money. The market is open 24 hours a day from Monday to Friday everywhere on the earth.
Working
Making a profit in this market is nothing different than making profit elsewhere: You buy when the price is low and you sell when the price is high. Suppose you decide that market indicates that price of EUR is likely to go up against price of USD. So you buy some quantity of EUR at the EUR/USD exchange rate of 1.1800 (say) and then your predictions came true and you sold it after two weeks at the rate of (EUR/USD exchange rate) 1.2536, thereby making a profit.
Even if you deal through Indian Rupees (INR), the software used (you have to use a computer) for treading takes care of that automatically. And even you dont have enough money to trade (say you wanted to buy 10000 Euros for the previous example), you can still use marginal trading (here you are trading with borrowed capital) system and make some decent amount of money from home.
Making Money
Two tools namely technical and fundamental analysis to understand the nature of the market and to deal and make a profit through forex trading. Technical analysis is a science where you may learn to predict the direction of price using the price chart analysis and indicators, while fundamental analysis is the ability to read a market by a feeble financial change or an industrial development in the advance country and can only be used by the experienced persons.
