There are also many ways to earn money online such as teaching jobs, data entry jobs etc. Earning through the forex trading is also one of those methods which can be used to earn the healthy amount of money. The forex trading is actually a way to transfer the currency of one country to another. The advantage of converting the currencies is that people now do not need to a lot efforts for getting their currencies converted. Forex trading can be a great source of income for the investors. There are many security markets which trade 22.4 billion dollars in a day while the forex traders earn 5 trillion dollars per day. You can also do forex trading online in number of ways.
• Learn the basics of forex business:-
The currency which you are spending is called base currency while the currencies which you are purchasing are called quote currencies. In order to purchase one currency, you will have to sale one currency which is the basic rule of the forex trading. You must know how much you should spend in quote currency in order to purchase the base currency. This system is called exchange rate. The price at which the broker is willing to purchase the base currency is called bid price. The price at which the broker will sell the currency is called ask price or offer price. The difference between the bid price and the offer price is called spread.
• Read a quote used in forex trading:-
Reading the forex quote is very important. The quote comprises of two parts. The one part displays the bid price on the left side of the quote and the other part shows the offer price on the right of the quote.
• Decide the currency you want to buy or sell:-
This decision requires the predictions of the person related to the economy. Predict which currency is going to be weak at this time. After predicting, sell that currency. For example, if you think that pounds are going to be weak, just sell them or exchange them for the currency which is stronger. You can also decide this by looking at the economy of the country. Have a look on the economy of the country. If a country has many goods to export, then for sure it will be earning a lot. This will make its currency stronger and then you can sell your currency to buy that country’s currency. Also see the election and political environment of the country. If the winning is strong and it can have a good hold over the economy of the country, then you can purchase the currency of that country. You can also read the economic reports being published in newspaper. You can see GDP and other growth rates to see the economic growth of the country. You should also see some other factors such as inflation and unemployment which also says a lot about the economy of a country.
• Learn the ways to make profit calculation:-
You can estimate your profit if you have got enough information about the methods to calculate the profit. Usually in forex trading, the method which is used is the pip method. One pip is equal to 0.0001 of the change in value. You can multiply the pips changed by your account.
• Open an online forex brokerage account:-
Choose a brokerage with care. Try to find someone experienced. Check the products sold by the broker. Visit the website of the broker and read all the transactions. You can open an account. The account you open can be your personal or you may share your account with broker in which the broker will assist you in trading. There will be some formal paper work which you will have to complete in order to open an account. You will get an email from a broker to activate your account. The broker will also provide you with the instructions.
• Make the analysis of the market:-
You can analyze the market so that you can make decision about the selling and purchasing currency. There are three types of analysis which are technical analysis, fundamental analysis and sentiment analysis.
Know your margins:
You can also invest your money in the market according to the policies of the broker. Your profit will be added to your account and your lost money will be deducted.
Placing the orders:
You can order your broker to execute your sales and purchases which is called market orders. You can also order to execute the trade on a specific price which is called limit order. When you have made a choice to buy a currency, then you will have to place a stop order.
• Keep an eye on your profits and losses:-
The forex market is the combination of ups and downs. You will face both profit and loss in the market. It is important to be attentive towards both.
