Can You Really Make Money From Forex Trading?
One method used by forex traders to make money is taking advantage of interest rate differentials between economies, for instance selling British pounds for more than they’re bought due to lower US rates. Other traders make money speculating on future price changes within specific currency pairs known as spot markets – these trades can make huge profits!
As anyone who lived through the nineties can recall, an abundance of “get rich quick” schemes pervaded radio, email chains and infomercials during that era of the yuppie was eager to make quick fortunes quickly. Trading is not one such scheme nor does it guarantee monthly income; most traders only manage to turn a profit once or twice annually at best! Those able to consistently turn profits may find that forex trading can provide them with enough income.
Capital is also key in trading successfully. Your level of capital will determine the level of risk you take on each trade; only invest money that is affordable to lose without using funds for other purposes, and always set risk limits per trade – and finally only trade with reliable brokers!
Practice is key to consistently making profits in forex trading, starting small and working up gradually as you learn from both successes and failures. Furthermore, keep learning by staying abreast of market developments; having a mentor may provide assistance throughout this journey.
One of the main attractions of forex trading is that it is accessible to individuals with low investments. Although each broker varies on how much of an initial deposit they require for trading to begin, typically it falls below $5,000. And because most forex traders leverage, even small investments can have an outsized impact in the market; some traders even manage to make millions through forex trading! George Soros, Bill Lipschutz, Paul Tudor Jones and Stanley Druckenmiller are renowned forex traders who have achieved outstanding profits. Each has developed his or her own strategy for trading, yet all adhere to three basic principles – practice patience and discipline – when trading. You can benefit from learning from both their successes and mistakes through Jack D. Schwager’s book Market Wizards.
Forex (Foreign Exchange) is an international market for currency trading that determines exchange rates. Open 24 hours a day, five and a half days per week, its price depends on supply and demand in the marketplace as well as economic news from different countries.