Trading in currencies is simpler than it seems. With the right training, you can have a second stream of income without logging in extra hours.
Published: Tue 11 Oct 2016, 2:18 PM
Updated: Tue 11 Oct 2016, 4:25 PM
How do you make good money? The impulsive answer, for many, would be to get a job or run a business, work hard to climb the corporate ladder and bump up the paycheck. True. But there is more to it.
Making money is an art - an art that allows your money to work as hard as you do and earn something extra on it every day, every month, without putting in strenuous hours. Forex (foreign exchange trading) is one the options with a number of unique features.
Know Forex
- The largest and the most liquid financial market
- Operates 24 hours a day, five days a week
- Currency trade happens in pairs
- Most of the trade happens in G-10 currencies
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Foreign exchange market is constructed of a global network of computers that connect participants such as banks, commercial companies, central banks, investment management firms, hedge funds, and retail investors and brokers from across the world. This is distinctly different from equities, which are traded on exchanges and are bound by geographies.
The decentralised connectivity has given forex trading immense depth with daily trade volumes of $5 trillion and above, making it the largest and the most liquid financial market. To put things in perspective, the daily transaction amount is equivalent to the economies of the UK and France.
You can trade at anytime of the day. Forex trade is open 24 hours a day, five days a week through terminals around the world. Major trading is done on G-10 currencies, and in pairs. The popular currencies include the US dollar, Canadian dollar, Japanese yen, Australian dollar, New Zealand dollar, British pound, Euro, Swiss Franc, Swedish Krona, and Norwegian Krone, as well as currencies outside the G-10.
"Forex trading is very popular (here compared with other asset classes) because it is easy to follow one or two currency pairs as compared to tracking hundreds of stocks. For the stock market, a trader has to track multiple companies and their financial results over and above the economic factors. This makes picking the right stocks very difficult because of all the volume of data that you need to constantly keep aware of," says Sushant Buttan, Chief Executive Officer, Professional Traders DMCC.
The popular pairs include Euro-US dollar, US dollar-yen, British pound-US dollar, Canadian dollar-US dollar, Swiss Franc-US dollar, and Australian dollar-US dollar.
How to get started?
Most trading companies and brokers in the region offer free seminars and lectures to guide retail investors, and free demo accounts. It is important that you learn the rules of the game, stay abreast with the latest business and economic news, and start with a demo account to test waters.
These firms are well equipped with trained professionals who can clear all your doubts and keep you informed on the latest news and views. Financial discipline, dedication and some cash can get you started and open faucets of second income soon. For any doubts, feel free to write to us and discuss.
Happy investing!
-suneeti@khaleejtimes.com
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