Training
Nowadays everybody should know about how to read and understand charts of financial markets based on building a side hustle. In Cryptolounge we do offer to train people to trade and invest in financial markets. Mostly we have to focus on training people for the crypto and Forex market. Most of us know or at least heard about crypto, but as a trader, I mostly recommend investing in that and start trade the forex market, the biggest financial market of the world.
So most of you probably have the question: what is FOREX?
The Foreign Exchange market, also referred to as the "FOREX" or "Forex" or "Retail
forex" or “FX” or "Spot FX" or just "Spot" is the largest financial market in the
world, with a volume of about $2 trillion a day. If you compare that to the $25
billion a day volume that the New York Stock Exchange trades, you can easily see
how enormous the Foreign Exchange really is. It actually equates to more than
three times the total amount of the stocks and futures markets combined! Forex
rocks!
What is traded on the Foreign Exchange?
The simple answer is money. Forex trading is the simultaneous buying of one
currency and the selling of another. Currencies are traded through a broker or
dealer, and are traded in pairs; for example the Euro dollar and the US dollar
(EUR/USD) or the British pound and the Japanese Yen (GBP/JPY).
Because you're not buying anything physical, this kind of trading can be confusing.
Think of buying a currency as buying a share in a particular country. When you
buy, say, Japanese Yen, you are in effect buying a share in the Japanese economy,
as the price of the currency is a direct reflection of what the market thinks about
the current and future health of the Japanese economy.
In general, the exchange rate of a currency versus other currencies is a
reflection of the condition of that country's economy, compared to the
other countries' economies.
Unlike other financial markets like the New York Stock Exchange, the Forex spot
market has neither a physical location nor a central exchange. The Forex market is
considered an Over-the-Counter (OTC) or 'Interbank' market, due to the fact that
the entire market is run electronically, within a network of banks, continuously over
a 24-hour period.
All you need to get started is a computer, a high-speed Internet connection, and
the information contained within this site.
Why Trade Foreign Currencies?
There are many benefits and advantages to trading Forex. Here are just a few
reasons why so many people are choosing this market:
No commissions.
No clearing fees, no exchange fees, no government fees, no brokerage fees.
Brokers are compensated for their services through something called the bid-ask
spread.
No middlemen.
Spot currency trading eliminates the middlemen, and allows
you to trade directly with the market responsible for the pricing on a particular
currency pair.
No fixed lot size.
In the futures markets, lot or contract sizes are determined by the exchanges. A
standard-size contract for silver futures is 5000 ounces. In spot Forex, you
determine your own lot size. This allows traders to participate with accounts as
small as $250 (although we explain later why a $250 account is a bad idea).
Low transaction costs.
The retail transaction cost (the bid/ask spread) is typically less than 0.1 percent
under normal market conditions. At larger dealers, the spread could be as low
as .07 percent. Of course, this depends on your leverage and all will be explained
later.
A 24-hour market.
There is no waiting for the opening bell - from Sunday evening to Friday
afternoon EST, the Forex market never sleeps. This is awesome for those who
want to trade on a part-time basis, because you can choose when you want to
trade--morning, noon or night.
No one can corner the market.
The foreign exchange market is so huge and has so many participants that no
single entity (not even a central bank) can control the market price for an
extended period of time.
Leverage.
In Forex trading, a small margin deposit can control a much larger total contract
value. Leverage gives the trader the ability to make nice profits, and at the
same time keep risk capital to a minimum. For example, Forex brokers offer 200
to 1 leverage, which means that a $50 dollar margin deposit would enable a
trader to buy or sell $10,000 worth of currencies. Similarly, with $500 dollars,
one could trade with $100,000 dollars and so on. But leverage is a double-edged
sword. Without proper risk management, this high degree of leverage can lead
to large losses as well as gains.
High Liquidity.
Because the Forex Market is so enormous, it is also extremely liquid. This means
that under normal market conditions, with a click of a mouse you can
instantaneously buy and sell at will. You are never "stuck" in a trade. You can
even set your online trading platform to automatically close your position at
your desired profit level (a limit order), and/or close a trade if a trade is going
against you (a stop loss order).
Free “Demo” Accounts, News, Charts, and Analysis.
Most online Forex
brokers offer 'demo' accounts to practice trading, along with breaking Forex
news and charting services. All free! These are very valuable resources for
“poor” and SMART traders who would like to hone their trading skills with 'play'
money before opening a live trading account and risking real money.
“Mini” and “Micro” Trading:
You would think that getting started as a currency trader would cost a ton of
money. The fact is, compared to trading stocks, options or futures, it doesn't.
Online Forex brokers offer "mini" and “micro” trading accounts, some with a
minimum account deposit of $300 or less. Now we're not saying you should
open an account with the bare minimum but it does makes Forex much more
accessible to the average (poorer) individual who doesn't have a lot of start-up.