Forex Trading

 

If you want to continue to invest your money throughout retirement, but want to be a little more involved in it than just buying shares one day and hoping they go up, consider Forex trading. Forex is foreign exchange trading, or trading the currency values of different countries. This is done by comparing two counties’ currencies against each other, such as the Canadian Dollar vs. the American Dollar, and it is all done online. Your web browser can be used for more than just researching Medicare supplement plans.

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You may not know this, but the Forex market is the largest market in the world. Unlike buying and selling stocks in hopes of earning a profit from your timing of it, Forex is typically done in trades where the selling takes place within minutes or hours of the buying. The value of a currency in comparison to another is constantly changing, sometimes only slightly, but sometimes by a lot. Forex traders take advantage of these swings in value to bet that the value of one currency will either go up or down, and then they sell it back once they are satisfied with the amount of change that took place. If they were wrong about their bet, they might sell it back at a specified point below where they bought it in order to stop their losses.

 

Medicare supplement plans 2019Since changes in currency values are typically by the fractions of a currency’s lowest denomination (think .01 pennies), the gains from making these bets alone would not be significant enough to make the trading worthwhile. Instead, traders use what’s known as “leverage” when making their trades in order to maximize the profits they are able to make from them. Leverage is the act of borrowing money from the brokers that carry out the actual trades to make the amount of money that’s bet some order of magnitude larger in order to make the most amount of money from the trade possible. Once the money is realized, the original loan amount is returned to the broker, and the trader is able to keep the rest of the profits.

 

Although it does require lots of time and research to fully understand how to be successful in Forex trading, trading itself does not need to involve much time at all after that. Many traders make only one or a few trades each day, or even each month. As long as you’re able to maximize your profits on one or a few big trades, you may not need to trade any more often than that.