Currency trading, is one of the most exciting and appealing work-from-home opportunities, and as such has garnered a lot of attention from skeptics and business owners alike. The process involves converting money from one currency to another, and then back to the base one in order to generate a profit. For example, a person may convert 1 USD (United States Dollar) into 81 JPY (Japanese Yen), equating to an exchange rate of 1USD=81JPY. When the exchange rate changes to 1USD=70JPY, you would then convert the money back into US dollars in order to gain a profit of 11 JPY. This concept is scaled up by the thousands and millions, providing an ideal way for people to generate a great deal of income with very little effort. The aforementioned description of a currency exchange is but a brief summary of the actual steps involved.
Understanding the basics is essential before progressing to more advanced strategies. The following terms should be memorized by any aspiring trader:
Pair: The two currencies of an exchange rate or trade. The following are popular pairs followed by their corresponding terminology:
USD/JPY - Dollar Yen
EUR/USD - Euro
AUD/USD - Aussie Dollar
GBP/USD - Sterling
NZD/USD – Kiwi
USD/CHF - Swissy
USD/CAD - Dollar Canada
Base Currency: The first in a pair, which is converted into another during the first step.
Counter Currency: Also known as 'terms' (or 'quote' when referred to in forex calculators), is the second currency in a pair.
Exchange Rate: The value of one currency as measured against another. I.E. - 1 USD = 80 JPY.
Trade Volume: The amount of money involved in a particular exchange.
These basic terms will help you begin to understand forex terminology so that you can gather the most edifying experience from your forex training.
Currency Trading Tips
Learning what causes exchange rates to fluctuate is the first step in becoming a professional. Political events, policy decisions, data releases, and other macroeconomic occurrences can have a major impact on the outcome of a single money exchange. Technical factors such as changes in equity markets, interest rates, and international trade can also have a substantial impact on exchange rates. It is necessary to learn how these factors affect your trades in order to find the most profitable pairs on a routine basis. It is also important to research various strategies that are implemented by professionals, some of which include the 'value trade', 'the carry', and 'momentum'. Managing risk and learning to utilize essential market strategies is one of the key components to becoming a professional trader.
Advanced Forex Trading
After dedicating further research to the aforementioned topics you should be moving towards a more advanced mindset, giving you the confidence needed to make substantial investments that can result in significant returns. Advanced users often use market analysis software to aid in data mining and to expedite the process of choosing the best pairs. If you want to become a millionaire with marketing you will need to continuously advance your strategies by brainstorming with other traders in an open forum. Tutorials and training regimens can also help you enter the field of advanced trading after only a few months of being a novice.
Currency exchanges are an integral aspect of global trade and finance, and will continue to impact the world economy and the salaries of millions of people around the world. It is up to you to decide whether you'd like to be on the upper hand of the market and reap the benefits of participating in this thriving industry.