If you already have a lot of capital, forex trading is a great way to make money from home (or anywhere else, if you have an internet connection). With that in mind, read on as we’re going to answer some common questions that will give you the big picture.
What is forex trading?
Forex trading (also called FX or foreign exchange trading) involves the exchange of one foreign currency for another. It is one of the most liquid asset markets in the world. Profits are made based on assumptions and educated guesses about how a particular currency will perform against others. All these are influenced by various factors including the country’s economy, news and events, etc.
Does it take time to learn?
It depends on your current level of knowledge. But if you feel somewhat computer savvy, the learning time can last from months to years.
You need to study the basic terms (see the bottom of the page) and probably invest a little in your training. Once you’re ready to enter the market, be prepared to spend some time each day watching how your trades are doing. Remember, they don’t all have to be winners to stay positive – just the majority!
How much can you expect to earn?
For obvious reasons, it depends on the amount of capital invested. But the good news is that even an average trader earns enough to live comfortably, with an average annual salary of around $80,000.
Ultimately, your capital, skills and education will play a key role in determining your overall earnings. Don’t rush in without any idea of what you’re getting into, as this is a surefire way to lose money.
What is the right strategy?
While it is impossible to cover every aspect of successful forex trading in the foreign exchange market, below are the most important points to remember.
First, always trade with the tools you have behind you. This will greatly increase your chances of making winning trades. The trick is to look at the moving averages of different time frames like 10, 50, and 100 time frames. You can learn all of this in a course on support and resistance levels, but the key is to make your moves Market averages are measured over longer periods of time to increase the degree of certainty.
Regardless of your forex trading knowledge level, no one is able to trade with 100% accuracy, so minimizing the impact of losses is important. So manage your resources wisely and don’t put yourself in a situation where one bad trade can make you lose all your money. In other words, think in terms of risk/reward rather than fear or greed.
Finally, don’t fall into the trap of thinking that your equipment must have at least 5 screens, a dedicated computer, and several speed indicators. A professional trader’s desk is not much different from where you are sitting now. As long as you stick to the basics of forex trading and don’t deviate from your core strategy, you should be fine.