Make money online with Forex - what is it?
The opportunity of making money with Forex has charmed a swarm of people.
07:33 27 January 2014
The internet has made it easy for people to find ways to make money and now Forex is fast gaining popularity. Forex stands for Foreign Exchange and it involves trading one foreign currency against another. The Forex Market is made up of traders, businesses and individuals who are all hoping to make money from the fluctuation of currencies. The Foreign Exchange market trades 24 hours a day, 7 days a week from four FX Centres located in New York, London, Tokyo and Singapore. This means that there is someone making trades all the time every day. The internet has also helped enable trade to be conducted online through the electronic buying and selling of US Dollars, British Pounds, Euros, Japanese Yen and Swiss Francs.
How to Make Money Trading Currencies
Currencies are often priced in pairs, like the USD/JPY or EURO/USD etc. A trader will have to buy and sell these pairs. In the case of USD/EURO the pairing simply stands for how many EUROS one US Dollar can buy. What a trader would do is to speculate how the value of one currency will increase or decrease. In the case of the EURO/USD if a trader believes the US Dollar's value will decrease in relation to the EURO then that is called a short call, but if the trader speculates that the EURO's value will increase in relation to the Dollar, then that is called a long call. You make money if your calls turn out to be right.
Steps on how to make money as a Broker
- Quote a Bid price: This is the price you pay to buy base currency.
- Quote an Offer Price: the price you can sell the base currency for.
- The profit lies between these two prices and it is referred to as the “spread”.