There are many people who assume that a standard nine-to-five job is the only way to make money. Having been employed in an office role or public service work since they left college or university, these individuals fail to realise that there are an awful lot of financial opportunities out there that they’re entirely unaware of.
One of these is forex investing. A means of capitalising on fluctuations in various currency values, it allows people from all around the world to earn extra capital outside of their employment – in some instances, to actually turn it into a full-time job in and of itself.
Intrigued and want to find out more? Then, here what’s you need to know about forex investing:
What is forex?
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The term ‘forex’ is a shortened form of foreign exchange and refers to the largest investment exchange in existence. Trading around $4 trillion every day, this unique marketplace is not only open to all major global institutions but also individual investors from around the world.
This is where the concept of currency trading comes from. The aim of forex investors is to speculate i.e. to buy a currency at one price and sell it for a higher price later on in order to earn a profit.
Traded in pairs – such as EUR/USD, USD/JPY, EUR/GBP and so on – the value of each individual currency is determined by the relative worth of another.
How do you make a profit?
Like stocks, currencies can be traded based on what investors think their value is or will be but the big difference between forex and other types of trading is that you can trade both down and up.
What we mean by this is that not only can you make money by buying currencies whose values are likely to increase but also by selling those whose worth is set to decrease. This means that, no matter how poorly the currency markets perform, there is always a potential profit to be made.
But how can you tell how a currency is going to perform in the future? The answer to this is not a simple one. Indeed, forex trading success requires a degree of both luck and skill, although the latter is the more important of the two.
Primarily, this comes from learning how to read the markets, and there are a number of tools that you can use to do this. These range from news stories and insider insights all the way through to the charts and data provided by the trading platform you choose.
Is currency trading a good way to earn a secondary income?
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For those who do well at currency trading, the degree of profit earned can be very impressive; for those who do poorly, the losses suffered can be equally dramatic. This is why forex trading is not for the faint of heart nor the ignorant and uneducated. Requiring dedication, intelligence, and skill to master, it can be a wonderful investment tool, but only for those who truly understand what they’re getting themselves into. That said, there are many incredible success stories out there so, if you think you have what it takes, it’s certainly worth having a bash at.
What do you think? Would you ever consider giving it a go yourself?