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Introduction.

Any one keen to take control of their own financial well being should consider entering the Forex Trading markets. So long as you’ve got a reasonable amount of capital behind you. Whether it’s from your regular savings, a redundancy pay-out, pension lump-sum or an inheritance; and are generally a financially aware sort of person - then there’s absolutely no reason why you can’t become your own boss as a Forex Trader.

Forex is simply Foreign Exchange.

Forex is all about exchanging foreign currencies for profit.

Just in case you’ve jumped to this article without reading any of the others in this website, dedicated to keeping you informed about financial matters, Forex simply stands for Foreign Exchange. If you’ve ever travelled abroad you’ll have a good idea what that means, won’t you? Whilst you can go abroad to many countries and still be able to pay for things directly with US dollars - those other countries also have their own currency too. So, if for example you’re going to most European countries - you need to trade some of your dollars for Euros (€). Regardless of the currency you’re buying you invariably won’t get one of it for $1. Regarding the euro you’re more likely to get around €0.80 for each $1, we actually say $1 to €0.80 - as we’re going from dollars to Euros. That is the Foreign Exchange (Forex) rate that you’d get changing dollars into Euros before you go abroad. On returning to the USA you’d want to convert any Euros you’ve not spent back to dollars. The exchange rate for Euros to dollars now needs to work in reverse and for every €1 you have to exchange you might get $1.25 for it (€1 to $1.25). However, it is really important here to appreciate that these Foreign Exchange rates vary from day-to-day and can, when the finance markets are in an extreme state of flux, change even minute-by-minute.

Foreign Exchange with bigger numbers!

OK, of course if you go abroad to Europe you’ll take more than one or two Euros. Let’s say you want to take $5000 worth of Euros. If the Foreign Exchange rate is $1 to €0.80 then you’ll receive 5000x€0.80 = €4000. OK so far? Let’s next imagine you only spend €3000 and so want to change €1000 back to dollars to return home with. If the foreign exchange rate back to dollars was still as the above example then, you’ll get €1 to $1.25. So, 1000x$1.25=$1250. Hopefully you’re already ahead of me now and can see that it looks like there’s a profit to be made here?

Let’s play some even bigger Forex numbers.

A head for figures will help you as a Forex trader.

OK, stay with me now. We’ll stay with the Forex rate from dollars to Euros being $1 to €0.80. If I convert $10,000 to Euros I get €8000. Suppose I don’t go to Europe and the next day with the Forex rate at €1 to $1.25 I convert all the Euros back to dollars. That’s 8000x$1.25=$10,000 - no profit but no loss. Alright, let’s change the scenario to one that’s a little more realistic. Suppose I’ve converted my $10,000 to Euros and then I wait a week. The Forex market changes and suddenly €1 is worth $1.30. What happens now if I convert the Euros back to dollars, will I make a profit or a loss? Well, 8000x$1.30=$10,400 - a profit of $400, just for waiting until the Forex, foreign exchange rate, is in my favor. However, what if the Forex had changed to €1 to $1.20? That would have given me 8000x$1.20=$9600 - a $400 loss, on my original capital of $10,000!

Being a successful Forex Trader.

Are you a good judge of financial matters?

Quite simply being a successful Forex trader is all about being a good judge of when to buy or sell a particular foreign currency. I’ve used the example of dollars and euros so far, but you could just as easily be buying and selling; dollars and sterling, euros and yen or pesos and rupees etc. Also, in the examples given above I’ve only stated currency rates to two decimal places; Forex trading relies on very small fluctuations in the value of one currency to another and so, say for the dollar as an example, you can expect the value of a currency to be shown at 5 or even 6 decimal places. For example, as this article is being written the dollar to euro exchange rate is actually: $1 to €0.739890. Tomorrow it might be $1 to €0.7378985 - the question is, is that good or bad for me if I’m buying or selling either of these currencies? Obviously it’s all quite mathematical and having a head for figures will help. However, with the best will in the world keeping on top of all the fluctuations and slight variations on Forex prices can be very difficult. Even worse, whilst you’re asleep in Denver or wherever, the finance markets and Forex traders are just waking up in Tokyo, Hong Kong and Sydney etc.

How to never miss a great Forex opportunity.

Work for yourself as a Forex trader

So, how can you be sure of not missing a killer Forex opportunity? How can you monitor all the Forex rates - all over the world and 24/7 at that? The simple answer is, of course, by using specialist Forex software. With a computer and fast/reliable internet connection you can be Forex trading globally 24/7. Modern Forex software allows you to simply set the parameters at which you want to either buy or sell foreign currencies, which markets you want to base those numbers on and, quite crucially, how much to spend. All of these processes can be fully automated or, if you wish, you can assume manual control as and when you want to. Especially helpful when you’re starting out many Forex software packages will also enable you to use the services of a personal account manager, to monitor your system and make recommendations to you.

Forex trading and stress.

Working as an independent Forex trader doesn't have to be stressful.

Whilst any financial dealing is not without stresses please don’t think you’re in for a life of shouting down a phone, or at someone else, as an online Forex trader. We’ve all seen images on the TV and movies of Wall Street and bank traders yelling into phones and completely stressed out. As an independent Forex trader you can sit back and let your computer take the strain!

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