The forex market is one which has the most volume of money flowing from economies to economies, businesses to businesses and from peoples pockets to pockets. There is a huge potential to make a very good income if one gets it right. However, this is easier said than done.
The forex market consist of trading currencies of all kinds, by either buying or selling. The money is made if you buy a certain currency low and sell it high, just as if you buy a house for $100,000 (low) and sell it for $250,000 (hight). The profit there is $150,000 (150% initial investment). The market movement, or volatility, which is the the price change and the rate of change is where people can make their money. If you buy a currency low and sell it high, you make a profit. Likewise, if you sell your car for $20,000 and then buy an identical one a couple of day later for $15,000, you saved $5000 for the same asset. Same as if you selling a currency high, and then buy it when it depreciates, you also make a profit.
Trading can be done by either technical analysis, or fundamental analysis. Technical analysis is the technique whereby a trader uses previous market data and trends to predict how a currency will react in the future. Fundamental analysis is the technique whereby traders follow economies and there decisions that influence the value of the currency. This may include bank interest rates, non farm payroll, customer confidence just to name a few.
All and all, the forex market is a risky one, so much so that 90% of persons to attempt to explore this opportunity usually FAIL. This is a scary and very realistic fact. I have personally been in the market for approximately two year’s, and have had a lot of ups and downs. To be successful at the forex market, one has to be very good at both technical analysis and fundamental analysis, neither of which I have master.
However, I am persistent and the key to success in this market is to continue to educate myself and don’t give up. I initially made losses in the beginning, but due to continuously surfing the net and learning new ideas, I have since made back the losses and am now making some profits. Once I stick to it, it would not be long before I start to enjoy the true successes of being a forex trader.