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How to Make Extra Money Trading Forex

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Forex trading looks complicated at first, but the decisions are actually very simple (Source: Pixabay)

There are many ways to invest and trade. We all know that investing is the best way to build wealth in the long term, but comparatively few understand how to do it. You may not have the resources to buy up an impressive stock portfolio, but you can probably afford to learn the ropes of FX trading.  Following on from my beginners blog post on how to get started in ivesting, I have another blog post today from some experts on the topic, but this time it's about how to make money trading Forex.

FX (or (FOREX) trading is the exchange of one global currency for another. Currencies are changing value all the time. For example, in February you would have had to pay $1.42 (USD) to buy £1 (GBP). Since then, these related values have changed, and now today it would cost you about $1.27 (USD) to buy the same £1 (GBP). This is FX trading.

People who understand the global situations that influence fluctuating currency values can buy low and sell high. And while that might sound like a bunch of concepts far too complicated to consider, good Forex trading methods are often based upon common sense. Take the relative movements of USD and GBP, for example. 

How the news influences currency prices

How to Make Extra Money Trading Forex

Brexit uncertainty has weighed down the Pound (Source: Pixabay)

The main reason that Pound Sterling has been losing value to the Dollar is Brexit. All assets (currencies included) exist in markets, and markets don't like uncertainty. As people who use Pounds have been listening to months of news about Brexit problems, confidence in the value of the Pound has diminished (at least relative to the dollar). 

That means that if you had traded Pounds for Dollars last February, you'd have more buying power in November. You could use that extra wealth to buy more Pounds than you started off with, for a new purchase around the home, or for anything you want.

The average person doesn't have an easy way to trade currencies. You might not even see anything but your national currency in your daily life. That's why dedicated trading platforms (like the one pictured at the beginning of this post) give people convenient ways to trade value, just as if they were to swap physical currencies in the real world. 

If you're thinking about becoming an investor, Forex trading is a great way to start. For one, becoming a successful fx trader requires you to learn about the world, just like professional investors do before making their portfolio decisions. For another, you can start Forex trading with very little spare cash (a single stock in an international company could cost hundreds). Furthermore, Forex trading can be done in your spare time, for spare money you need for various purposes. 

Few people get wealthy trading currencies, and there are significant risks involved, especially if you don't do your research. But if you're interested in learning about world events as they pertain to investment opportunities, Forex can be a fun and affordable way to get started. The skills you learn will transfer into future investment types, and the confidence you build from Forex success will help you in all future financial endeavours. 

 

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