Monthly Archives: May 2015

It is a very simple and at the same time a very complex market, simple in that you could define it as the exchange of one currency for another during a period of change in which the currency you made an exchange for either increases or decreases in value against the one you used to purchase it. Of course the value of currency doesn’t change a whole lot (under 1 percent in a day typically) when compared to stocks, bonds, etc . . . So how do you make money by trading in Forex? That is where the complicated elements of defining it begin, and go on for a very long time.

It all begins with leverage, if you were to take $ 1000.00 and invest it for a return of .0025 percent that would be a profit of $ 2.50. What this means is that you’d have to invest a whole lot more money to ever see any profit that really makes gluing your eyes to charts worth it. This is where leverage comes in. A recent regulation in the US stipulates leverage can only go as high as 50:1 (before the regulation it was limited only by the prerogative of the broker, but no longer), meaning that if you give your broker $ 1000.00 they add another $ 49,000.00 to it and so now if you see that .0025 percent profit your $ 2.50 becomes $ 125.00 and so on, of course your broker will take a cut but even if you only take a total of $ 100.00 an hour well . . . you get the idea.  As I said before however, I have only begun to address the often maddening complexity present in the online Forex exchange, international currency exchange also brings about the numerous aspects of one country’s currency being bet against in favor of another.

There are many things which can influence the value of currency which can include (but are not limited to) employment rates, interest rates, current events (of all sorts), and so on. So while taking in and understanding the data from these events is crucial it is not the sum total of a solid decision making process by any means. Knowing when to get in and when to get out, having a solid stop loss and always remaining versatile is key to success in the Forex market. Of course everyone will put their own spin on things, have a “system” which suits their earning goals and personality.

The author is a Forex trader and financial analyst residing in Denver, Colorado.  To stay up to date on all the latest developments in the financial world and beyond be sure to stay up to date with the latest forex quotes.

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The Euro has seen significant shifts due to an outspoken central bank who is asserting that the EUR will be on the rise. The EU continues to experience fallout from Italy’s dependence upon Libyan oil. Other continuing challenges for the continent include a populace that is frustrated about austerity measures. These measures have hindered education and ripped down labor laws that were established to protect employees of companies both public and private. The resulting outcry in the public has manifested in demonstrations that have become violent and hindered day-to-day living of all citizens.

The continued evolution of trading between China and Japan could very well provide that stability that the JPY and Japanese economy at large has needed for decades. A lack of American appetite for goods coming out of Japan has meant staggering losses for the island nation. Now that China has completely emerged from its industrial era Japan can enjoy a customer that will pay its bills on time and buy far more goods than any other country has before at any other point in history. China has the world’s largest population and it enjoys the largest surplus of any government in the world.

Australia and the AUD are enjoying a rising economy due to an outstanding gold market, the value of the USD and other major currencies has been going down steadily for the last several years driving the value of gold up 5 to 6 times what it was before. All currencies have experienced a series of fluctuations on the forex exchange due to a variety of problems with the global economy, this has caused the value of gold to rise all over the world. As the world’s fifth largest gold producer Australia enjoys a place of relative security supplying one of the world’s most valuable commoditie.

The right way to approach the Japanese economy and the JPY when traded on the Forex market is with extreme caution. While the absolute worst may be over for the island nation for the time being there is still quite a bit of uncertainty with regard to possible roadblocks when it comes to rebuilding the country’s economy. There may not be enough money to pay for all of the damage that occurred not only from the nuclear reactor but also from the tsunami itself; currently there are over 500,000 homeless Japanese citizens as a result of tsunami and caring for them may be a very expensive endeavor.

The author is a Forex trader and financial analyst residing in Denver, Colorado.  To stay up to date on all the latest developments in the financial world and beyond be sure to stay up to date with the latest forex quotes.

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