Guest Post by Jan Erik Miranda
Are you ready to trade?
Before you venture the risky world of Forex, the first thing you need is to have a computer with a high-speed internet connection, and second, you should have enough knowledge about the trade and/or have undergone some sort of Forex education or training. You must remember that trading in Forex involves maximum amount of risks that even veterans and traditional traders alike are losing huge money in this trade. So, my advice is that you should educate yourself first and practices trading until such time you are familiarize with the system and then you’re raring to go.
To trade Forex you need a Forex broker. Forex brokers are mostly online. Just google the key word “Forex” or “Forex broker” and big G will display hundred of brokers all over the world, but majority are US based. These brokers offer “mini” and “micro” trading accounts. A “micro” account may be opened with a couple of hundred dollars or less. In all of my posts in the past I talked of trading with a minimum account deposit of $300. Well, that amount is suited only for newbie or ordinary people like me. But if you wanted to earn much better (or lose) the ideal amount for a “micro” account is at least $1,000 to start with. For a “mini” account you should have at least $10,000…too big? No, not really. You’ll find it why as you go along reading all I have to post here.
In the Forex Exchange Market, you buy or sell currencies and nothing more. Trading in Forex is quite simple. The mechanics are very similar to those found in other financial markets. So, if you have experience in trading such as trading in stock market then you can easily understand FX market and do trading.
Keep in mind that the object of Forex trading is to exchange once currency for another with the expectation that the price will change, so that the currency you purchased or bought will increase in value compared to the one you sold.
Example: You purchase 10,000 euros at the EUR/USD exchange rate of 1.15. Six days later, you sell it back to US dollars at the exchange rate of 1.21. So, getting the difference between $12,500 (10,000 x 1.21) of euros you sold and $11,500 (10,000 x 1.15) of euros you purchased you earned a profit of $600.
An exchange rate is simply the ratio of one currency over the other. In the example above, the EUR/USD exchange rate indicates how many US dollars you can purchase with 1 euro, or how many euros you need to buy with 1 US dollar.
About the Author:
As an internet marketer, Jan Erik Miranda is also trading Forex for quite sometime now. For more articles on Forex trading and/or currency trading such as this one, visit International Forex Trading.
