The Forex market is the most lucrative market in the world with an average traded value that exceeds $1.9 trillion per day and includes all of the currencies in the world. Read that again – almost $2 000 000 000 000 traded value PER DAY!!! That means almost 2 000 000 000 000 opportunities to add a dollar in your wallet. And the fact is that more than 90% of the people, daring to risk their money on the Forex market fail missarable.
The truth is – most people are not fully aware of what exactly is going on there. They just take ilogic decision to entrust their savings to some so calleg "guru" offering fast money, 99.99% succesful trades etc. and wait for a green rain to pour on. Imagine forex as a mountain river. Many people jump in and drop some cash on deposit. They don’t know and don’t care about the strategy. And when they finally realize that they are moving in the roaring water – it is too late – the account is already blown!
The truth is – money does not come from nowhere. It simply transfers from people who trust to people who know. Remember, most money is made on Your ignorance.
Investing means simply putting your money to work for you. Essentially, it’s a different way to think about how to make money. We were taught that you can earn an income only by getting a job and working. And that’s exactly what most of us do. There’s one big problem with this: if you want more money, you have to work more hours. However, there is a limit to how many hours a day we can work, not to mention the fact that having a bunch of money is no fun if we don’t have the leisure time to enjoy it.
The idea of cloning Yourself is pretty tempting (as seen on "Multiplicity" motion picture), but it comes to not so desired results (also seen in "Multiplicity" motion picture). But in reallity, you can’t create a duplicate of yourself to increase your working time, so instead, you need to send an extension of yourself – your money – to work. That way, while you are putting in hours for your employer, or even mowing your lawn, sleeping, reading the paper or socializing with friends, you can also be earning money elsewhere. Quite simply, making your money work for you maximizes your earning potential whether or not you receive a raise, decide to work overtime or look for a higher-paying job.
It is good to highlight that – Investing is not gambling. Gambling is putting money at risk by betting on an uncertain outcome with the hope that you might win money. Part of the confusion between investing and gambling, however, may come from the way some people use investment vehicles. For example, it could be argued that buying a stock based on a "hot tip" you heard at the water cooler is essentially the same as placing a bet at a casino.
Obviously, everybody wants more money. It’s pretty easy to understand that people invest because they want to increase their personal freedom, sense of security and ability to afford the things they want in life.
Forex is about trading money in differents forms – dollars ti euros, dollars to yens etc. All trades made in the forex market are made in pairs. In other words, one currency is always quoted against another currency, for example the U.S. Dollar against the Japanese yen or the U.S. Dollar against the euro. When a trader buys the dollar against the yen, he or she is hoping or speculating that the dollar will increase in value, while the Yen will decrease. Conversely, when the trader sells the U.S. Dollar against the Japanese yen, he is speculating that the dollar will decrease in value while the yen increases in value. If he buys the dollar-yen, but the yen increases in value, the trader will lose money, since he now owns dollars which have decreased in value compared with the yen.
A trader can minimize his or her losses by predefining where to exit a position, should the trade not work out as intended. The trader can leave an order in the market with his or her broker, and the order will be automatically executed if the parameters are met. Hence, a trader can decide how much of a loss to sustain before exiting the position. This type of order is known as a stop loss order, and it is considered the most popular risk management tool. Traders who do not leave stop loss orders in the market can sustain large losses if their position moves in the wrong direction, especially if it is a leveraged position. In some… Read more…