Ask yourself
What services are offered? Do they have research available? What is the cost to you for investing online? What are the real commission costs to do a trade, including any handling fees? How are confirmations sent to you — by e-mail, by snail mail, by phone? Can you enter orders by phone, by e-mail, directly on-line? Does it cost extra to call and talk to a broker for help with your account? In a low interest rate environment like the US, it can be a problem to invest in secure high-yielding fixed income investments. Most of these investments are around the base rate as set by the government. It would be difficult to get secure investments around the 3% mark. In New Zealand or Australia some fixed interest investments are worth 7.5% or 8%. An issue with making an investment abroad is that currency rates are so volatile that even though you make 5% on yield, that gain can be wiped out in currency rates.

Equally, currency rates can work in your favor and your investment will have an extremely high yield. To eliminate this uncertainty you can make a foreign investment today using a spot trade and also set up a forward trade at the time of investment maturity. This way you eliminate currency risk in your investment and can capitalize on foreign products. Setting up a forward trade costs money but in many instances the cost of the trade is minimal in comparison to the gains that can be made.

Matt Clarkson

When talking about the Forex Market the following questions arise.

1) How much money can I make at the Forex Market?
A lot, you can make a fortune!

2) Can I loose money at Forex?
Yes you do. In fact you can loose your entire portfolio just minutes after you start trading.

3) Is it volatile?
Yes it is. It is very volatile.

4) Is it risky?
Yes it is. It is very risky.

5) What is the leverage at this market?
The leverage is usually 100:1 on most firms but sometimes 200:1 and some firms offer up to 400: 1 leverage. This means that for every dollar that you have available for trading you can borrow up to 100 to trade. So with $1000 USD you can control $100,000 of currency. No other market gives you so much liquidity and so much leverage at the same time.

6) How did The Forex Market begin?
Currencies like dollars and sterling pounds were backed up by gold until 1971. After 1971 countries abandoned that norm and started to issue currencies as they pleased so the Forex market originated where central banks could exchange their home currencies for other country currencies. That ensured certain security for the banks in case their own currencies devaluated against the one they were exchanging it for. So if a bank sold dollars and bought sterling pounds and the dollar devaluated too much in relationship with the sterling pounds, the bank didn�t loose money, because they had bought large amounts of sterling pounds. Do not confuse Forex with the money exchanging business. The money exchanging business dates back to thousands of years ago. People exchanged one kind of coin for another, silver for gold, etc. Today we exchange one currency for another through The Forex Market.

7) Why did nobody know much about Forex until recently?
Until a few years ago only the �big guys� could play this game. The initial requirement was that you could trade only if you had about ten to fifty millions to start. Remember that this was intended to be used by bankers and multinational corporations not �little guys�. Forex was widely opened to everyone on the 90�s decade, a very few years ago. It is the number one market in many different aspects. It is the most liquid, largest and it is growing fastest than any other financial market in the world. It attracts many new investors because of its large leverage and low starting funding requirement. Some firms let you start with a mini-trading account which reacquires only $300 – $350 to fund your account and start trading.

How can I make lots of money on The Forex Market or how can I loose it all fast?
You can leverage your positions at 100:1. That means that if you start with $1,000 at full margin you can trade $100,000 of currency. Check this out. If you have $1,000 to trade and you want to buy euros for example, if the EUR/USD pair is at 1.32 and it rises to 1.33 in ten minutes you make a $1,000 profit in just ten minutes. You double your initial investment. But if you are wrong and the price goes down to 1.31 then you suddenly loose your entire investment. By just a 1-% change on the underlying you make a huge gain or a huge lost. Imagine that you are right on a long-term trade at 100:1 leverage and the pair change in value 20% favorably to you. If you traded $1,500 you would get around $30,000. This could happen in just one day, but at the same time if you are wrong and the market moves against you, you could loose your entire portfolio in 5 minutes. So you must be informed and you must know what you are doing if you want to make money on this market. High leverage and low initial funding requirement is what attracts many new and potential investors to Forex.

9) How can I start trading?
Forex trading is still controlled by an inter-bank system. There are no broker fees to pay and no commission. It is different to the stock market where you must pay commissions to the brokerage firm for every order executed. At Forex there is just a slight difference between the trading quote and the actual price of the currency. For example if you are trading the EUR/USD pair and the pair is trading at 1.3235 you will get a quote at 1.3237. You see the differences. That small difference goes to the Forex Firm through which you are trading. I personally believe that Forex encourage online trading more than any other financial market. Many individuals are self-made traders and trade from home or business offices. You just open an account with a Firm like Oanda, Refcofx, GFT or any other. There are many out there. Just choose the one that best fits your needs and interests. After you fund your account you will be able to start trading.

As you can see Forex is very interesting, profitable and at the same time risky. So people make fortunes and others loose their life savings. Information is the key. I just briefly described some aspects of The Foreign Exchange Market on this article.

John has years of experience on subjects related to business, finance, wealth building, how to profit from e-books, the stock market, forex market, real estate, employment, true home based business opportunities, how to attract amazing wealth to your life, and everything related to money, business and finance.

John Kaka