Forex Trading is totally new to me. I always regarded it as the domain of merchant bankers, corporate raiders and the like.
Essentially I stumbled across a website which recommended downloading a product called eToro onto my computer as the platform for trading.
Nothing could be easier, the download was complete in a matter of minutes, icon on my computer desktop, one click and ready to go.
eToro seems every bit as good as the recommendation proclaimed, simple screens, great explanations, easy to understand. Even a practise option where your given $2000 to kick off with before risking any real coin.
Forex trading explained in simplest terms is as follows:
You are buying one currency and selling another (currency pairs).
eToro has trend graphs and indicators showing where the smart moneys going. When news pops up such as the crashing Euro/Pritish pound due to a financial melt down in Europe this should be money for jam.
ie. buy currency (almost any and pair it against the Euro/Pound and make a killing). This is not rocket science!
eToro also protects you by a stop loss at the point of losing all your investment. But you can predetermine a which point to stop loss or indeed take the profit so you don't have to monitor things around the clock.
Leveraging your trade is capable up to 400x. allowing bigger profits (& losses!)
Profiting from trades:
You BUY a currency pair if you expect the first-named currency to strengthen against the second-named currency, and you SELL a currency if you expect the first-named to weaken against the second-named currency.
Example of making money by buying NZD's:
Trader's Action NZD/USD
You BUY 10,000 NZDs at the NZD/USD exchange rate of 0.7500
($NZ) +10,000 costs you ($US) -7,500
One week later, you exchange your 10,000 NZDs back into US dollars at the exchange rate of 0.7600
($NZ) -10,000 now gives you ($US)+7,600
You earned a profit of $100USD @0.7600=NZD $131
Example of making money by selling NZD's:
(ie: you think the $NZ will go down against the $US )
Trader's Action NZD/USD
You SELL 10,000 NZDs at the NZD/USD exchange rate of 0.7500
($NZ) -10,000 netts you ($US)+7,500
One week later, you exchange your 10,000 NZDs back into USD at the exchange rate of 0.7400
($NZ)+10,000 only costs you ($US) -7,400
You earned a profit of $100USD @0.7400 = NZD135
Disclosure: QuikRiches does not benefit from any implied recommendation of eToro
