In the last few years Forex has gained a huge popularity, much more than stocks and indexes. In the article 10 Good Reasons Why You Should Trade In The Forex Market I introduced the reasons of this popularity. In this article I want to show you how to make money trading forex.
Maybe you have heard stories about people becoming rich trading Forex. Maybe you have read articles about part time traders leaving their full time job to be professional traders. Maybe you saw an ad promoting how good the life of a currency trader is. All this is possible, making money trading is possible, but it requires some commitment and skills.
How to Make Money Trading Forex
The simple answer is: buy a currency and sell it when the value is higher. For example, you have the pair EURUSD quoted 1.0250 and you buy 1 lot of EUR, then you wait the rate to reach 1.0300 and sell 1 lot of EUR, you earned 50 pips (500$ considering a pip value of 10$). Seems easy?
The hard part of making money trading currencies is to forecast the direction of an exchange rate and stick to a strategy. To make money trading Forex you need to understand how the value of a currency will change and be disciplined. This ability is the result of study and experience.
To become a successful trader you will need:
- Knowledge of the Forex Market and terminology
- Knowledge of the Forex mechanisms
- Depending on your trading style you may need knowledge of maths
- Mindset, discipline is one of the most important skills to become profitable
- Winning Strategies, you need trading strategies with entry and exit signals, you can’t just listen to your instinct
Whether you are a beginner or an advanced trader, you can make money (or more money) trading Forex. If you don’t know where to start or how to improve you can read the article Your Path to Make Money Trading the Forex, it will give you a direction.
If you have any feedback please leave a comment below.
Please also Like and Follow Us on Social Media.