Forex online trading is changing everything we thought we knew about Forex. Ideas as to what constitutes a ‘typical Forex trader’ have gone out the window as more and more professionals across a wide range of industries are realizing that they can become financially independent or at the very least subsidize their income by becoming Forex traders.
This change of clientele has utterly transformed the world of Forex, doubling the number of traders in ten years and influencing market dynamics significantly. Let’s go over the finer points of Forex online trading for the uninitiated.
How does Forex online trading work?
Online traders open an account with an online brokerage. They usually have the option to start with a practice account but in order to trade for real you’ll have to make an initial cash deposit of a few thousand dollars, the exact number depends on the broker.
Your broker will integrate your account to their systems via Metatrader 4. Once you have Metatrader 4 set up on your home computer, you will receive all the newest Forex data direct to your PC. Just place the orders for trades you want to make and they will be instantly re-directed to your broker.
How do I make profitable trades?
You make profitable trades by accurately predicting the fate of one currency or another. So for example, if you think the Canadian dollar is going to improve then it makes sense to buy up Canadian dollars; when the value rises you’ll earn the difference between the two prices – nice!
The key is to correctly identify when and where these fluctuations are going to occur. You need to examine the factors which affect a country’s economy, for example the health of imports and exports, geographical issues such as natural resources and natural disasters, and political instability. These factors are what will determine the future value of that country’s currency.