Foreign exchange in simple terms is the process of exchanging one currency for another. And that could be for different reasons: tourism, investment, and/or commerce.
Your national currency is traded against other currencies in the form of exchange rate pairs.
A forex broker is a financial services company – usually online – that provides traders access to a platform for buying and selling foreign currencies.
Transactions in the forex market (short for foreign exchange) are always between a pair of two different currencies. A forex broker may also be known as a retail forex broker or a currency trading broker.
Now why do I bring up this topic, you may ask. Because with real estate getting more expensive, and waterfront property following and carrying increased risks due to increasing flood insurance costs, howeowners and investors should look into investments that can start small, have higher liquidity and even higher returns such as XTrade.
If you are interested in investments, you may want to take a look at Forex. As a decentralized market where all the currencies of the world are used for trade, Forex is the largest liquid market in the world.
It carries it’s risks, but most brokerage services offer a variety of educational materials, including articles and videos, that you can apply to teach yourself.
But just how are folks making money?
Choosing a good Forex brokerage service?
A search for “best forex brokerage services” or simply “best forex brokers” will bring tons of results for you. So how to pick a good one to get started.
Local brokerages services to your country
You can start by taking a look at the largest players in your country. Those players can give you more security as they are usually platforms from large banks and investment agencies.
But smaller tech players are also advantageous with smaller or non existent charges.
Another thing to consider is how fast and convenient is the platform. Forex as a currency exchange method, moves fast and you may want to have ready access to your portfolio for quick trades while on the go.
Modern forex platforms are pretty complex, with many moving parts on both the buy and sell side. Brokerages work by connecting buy and sell trades.
In the past, currency trades would involve a fairly lengthy process, with one or more individuals working to execute the order correctly. With technology, brokerage sites/ apps can make trades automatically with the element of speed as a major separator between the best and the average platforms.
Research large and smaller players and how they operate in your country. They will have access to your money (you can define how much you want to invest), so it makes sense to work with a trustworthy player.
Countries have regulatory bodies, such asSouth Africa’s Financial Sector Conduct Authority (FSCA), United Kingdom’s Financial Conduct Authority (FCA), and in the USA, the Commodities Futures Trade Commission (CFTC) and the National Futures Association (NFA).
Ease of use plays a major factor
As already mentioned above, the desktop and the mobile trading platforms have to be well structured, professional, and it perform well.
I will admit that a forex website, usually looks like a complex or difficult platform to use. That dark background with numbers and graphics can seem daunting to regular people.
Great navigation tools and intuitive choices are convenient as some people won’t take the time to read guides, and How Tos and will go straight to trading and placing bets.
Fees and payment options
When trading derivatives you trade on margin. Meaning a deposit made, opens a position, and what the platform does is lend you the rest of the money required and then charge you a small fee overnight to cover the cost of the money you just borrowed.
If you trade the same day, that overnight fee doesn’t apply.
As you can see Forex has its particularities, such as when Forex trading in a currency other than your account’s currency may incur a currency conversion charge. There are also some extra services that they charge for like Inactivity fee. Be very aware of this one. Charges from third parties such as for international deposits and withdrawals.
How much do people make trading online
When it comes to online investment for liquidity, forex may be a good option for small investments, but it is fast paced and has its own particularities. But How much do Forex traders make?
For skilled investors it is a great option for returns with risk management as a critical part of trading. Usually staying at 1% risk, is ideal risk management.
That means that If your account is $100, you can only risk 1 dollar per trade.
Beginner traders risk much more than 2% of their account on a single trade and that isn’t recommended. You could have a series of losses at for example 10% of an account risked and 6 loss trades significantly mean depleting someones capital.
With a $3000 account, and risking no more than 1% of the account on EACH trade ($30 or less), one can make $60+ per day.
As you can see, the topic is popular because it is possible to make money from day trading. Hopefully on a waterfront dock, overlooking a quiet river or canal and sipping on a drink.
