Forex

This may look like gobbledygook, but it won't take long before you can understand all the numbers, figures, symbols & terms.

The Foreign Exchange Market, is where currency is traded against each other.

An example:

Imagine this: You are going to America on holiday, you visit the travel agent and buy £500 worth of dollars, for arguments sake lets say that equals $500 dollars even after the fees.

You go to the Airport but all holidays are cancelled, you haven’t spent a single cent of your $500 dollars, so you take it to the bank to get it swapped back. But because of the exchange rate changing your $500 dollars are now worth £510, making you a profit of £10.

Now the above example wouldn’t work in real life, unless the exchange rate jumped a significant amount or the fees charged by the bank/travel agent were actually that low.

But the same principles apply to Forex exchanges, you buy a currency when its low or likely to increase, this buying and selling in quantities over short periods can bring in a few pounds or if the market is in your favour a few hundred pounds per transaction.

Why does the exchange rate go up and down?

Currencies are always traded in pairs – the US dollar against the Japanese yen, or the English pound against the Euro. Every transaction involves selling one currency and buying another, so if an investor believes the Euro will gain against the Dollar, he will sell dollars and buy euros.

In otherwords he thinks lots of people are going to be buying the Euro so therefore he buys lots before the price goes up.

The price fluctuates due to supply and demand of each currency against the other, the buying pressure on the Euro will cause it to get stronger relative to the dollar.

Is it safe?

Yes, generally however it really depends on the company you use to buy and sell with. We have tested two websites on your behalf these are listed below, we have withdrawn several thousand pounds over the last few months from both of these.

What if the market dramatically drops?

It can be a relatively safe market for the individual investor. There are safeguards built in to protect both the broker and the investor and a number of software tools exist to minimize loss.

Both of the websites below allow for stop marks, these tell the software to buy and sell at certain points i.e. if you are down £20 on one day you may want to sell to reduce any further risks, however you may set it to sell when you reach £150 profit on one day.

I’m not confident enough to put my money on the line.

No worries, in this modern world you can now ‘copy’ other traders, you can simply view their buying & selling history or click a button to actually copy every trade they do at a smaller amount, i.e. only risk £10 by copying all of their trades.

For those interested the scheme is called Copy.Trading & can be found once you signup / deposit.

OK how do I get started?

First of all you need to sign up with a Forex trading company, this is where you deposit the funds you want to invest, practice using a system and learn the basics.

Practice for free before placing real money on the line, here are the best current offers:

Learn more

It’s possible to go on courses, events etc – These can be good, but be careful as we constantly hear reports of ‘scam’ like activities!

  • Free 2 hour seminar near you  - Learn the basics – But be very careful if you’re easily persuaded, they charge £2000+ per day for the next courses!