When it comes to short term trading, such as scalping and day trading, most people are actually losing money. A well-known over-the-counter market that is used a lot in this way is the FOREX, or foreign exchange market.
As most of you might or might not know, investors trade currency pairs in this market. But why, you probably wonder, do institutions and people trade so much on the FOREX if most of them actually lose in the long run? The answer is simple: it's easy to use, you can trade with excessive leverage and it's very liquid.
Let's check the first point: the FOREX is accessible to everyone. All you need is a computer with an internet connection, and a few bucks. Then, you just need to find a decent broker, download the trading platform and you're good to go. Anyone can do that!
Then, there's the leverage. Financial leverage can be used in a few ways, but in this case it's just borrowing. In fact, you can take a position that is far more important than what you could usually afford. Let's say you have enough money in your account to buy 1 lot (that would still mean a good amount of capital since 1 lot means 100 000 units). With a 200:1 leverage, you can take a 100 lots position! Imagine how much money you'll get if things go well for you. Now, if the odds weren't in your favour that day, you can also imagine how much money you can actually lose in a very short matter of time.
There is one last thing investors like about the FOREX; despite being an over-the-counter market, meaning there is no central exchange place or regulation institute, it is very liquid. You can take a position within a fraction of seconds, and exit it as fast. The main reason behind this is that the FOREX is a high volume trading market; there is a lot of money being traded daily (it's counted in trillions of US dollars).
Now, these seem like good reasons to invest in this market. However, you might be thinking: "Well, it does look cool and everything, but it also seems risky. I don't know... If most people are losing money, why could I be part of the few that actually make profits?"
Because you don't want to start trading this market (or trading in general) without being prepared. There are ways to elaborate your own trading strategy and make it work. There are ways to learn about the FOREX market basics and some very useful tips.
We've been trading the FOREX for years. We know how to make money with currency trading. We know how to be patient and to stop our losses. If you want to know more about the FOREX, make sure you check http://forexonlineguide.net/. We can help you out!
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