Is the cost of a decent lifestyle rising and you can’t keep up with the expenses? Are you working overtime, yet the expenses extend the salary? If yes, then your financial lifestyle requires some dramatic changes.
Instead of just trying to save more and limiting your basic consumption needs, make your money work by engaging in Forex trade.
How to approach Forex trade and improve your financial well-being? Let’s discover together.
What is Forex?
Forex is a global financial market whose main assets are currencies and their derivatives. The basic operation within the Forex market is based on buying/selling currencies according to their value fluctuation. Although Forex is highly beneficial, providing relative stability to the financial market and personal funds, some people consider Forex haram, based on some religious views. Overall, Forex is halal, as it enables traders to keep up with global financial changes and make money on constant global instabilities.
How does Forex Work?
Forex market works around the clock five days a week, letting traders from a global society participate in trades,
Back in the day, Forex was mainly powered by large financial institutions and banks, yet now, it is more trader-oriented (retail-oriented), which is a great opportunity for all types of businesses or traders, regardless of size.
One of the interesting details about Forex is its non-physical existence, as there is no central institution to regulate the trade. Instead, there is a chain of digital terminals and networks, which processes all the trades and transactions.
What Are the Basics?
The basic unit of Forex trade is a currency pair. All of us see the pairs while exchanging currency at the exchange points. Overall, there are three groups of currencies:
- Majors – the currencies of strong economies that are always paired with the US dollar: the euro and US dollar: EUR/USD, the US dollar and Japanese yen: USD/JPY, the British pound sterling and US dollar: GBP/USD, the US dollar and Swiss franc: USD/CHF, the Australian dollar and US dollar: AUD/USD, the US dollar and Canadian dollar: USD/CAD, the New Zealand dollar and US dollar: NZD/USD.
- Minors – the combination of strong against each other, excluding the US dollar.
- Exotics – rarely traded assets, which are typically related to countries with developing economies. The currencies are rarely used in global transactions due to their low liquidity.
The money is made when opposing currency to each other,
How to Start Forex Trade?
1. Scientia potentia est – knowledge is power
Forex trading journey requires a solid preparation and a profound understanding of the way everything functions. Successful trading is a full-time commitment to learning if there are long-term plans regarding the Forex trader.
2. Choose the broker
Forex trading is not possible without a reliable Forex broker. First of all, it is a matter of financial safety, secondly, only certified brokers are legal.
The right broker is licensed by global regulatory bodies, like the Financial Conduct Authority (FCA) in the UK, the Australian Securities and Investments Commission (ASIC), the National Futures Association (NFA) in the USA, and the Cyprus Securities and Exchange Commission (CySEC), and has permission from local authorities.
It is also useful if the broker has an informational blog, like fbs trader, which shares insights regarding the trades, strategies, current trends, etc. It helps the new traders to enrich their knowledge and shows the trader is willing to share valuable insights into the Forex market functioning.
3. Develop a strategy
When embarking on a Forex journey, it is important to outline the guidelines for your market movements. The strategy should be based on your vision and understanding of the market and will help to protect you against hasty decisions.
4. Know your limits
Having a trading strategy is helpful, yet there is always a need for self-control. Oftentimes, the traders are so immersed in the trade that they can easily go over the limits, even if there are no available funds. There is a good rule of thumb in Forex – not to trade more than 2-3% more than your available trading funds. If you are a ‘freshman’ even 1% will be enough, just to see how everything functions.
5. Be vigilant
Being a successful Forex trader doesn’t only mean knowledge of the Forex terminology, strategies, and trading style; it relies greatly on your understanding of the geopolitical and economic performance in the world. Moreover, watch the news of global leaders, and analyze their influence on current events, as big players are decisive for currency behavior.
The Final Thoughts
Forex has always been an alluring venture, as it offers quite impressive incomes. However, nowadays, Forex is more of a helping hand against the turbulencies of the world and economic instabilities, as it helps to keep up with ever-increasing inflation, and thus, helps to preserve the value of savings and multiply your income.