Currency trading as a living
This is also called trading foreign exchange or forex trading. Many people start it as hobby and in the long run it turns out to be a great source of investment income. Forex trading involves trading with different currencies. The trader need to be more speculative so that at no one point he loses. One sells one currency to purchase another. The base currency is the currency that the trader is spending on while the quote currency is the currency that the trader is purchasing. The exchange rate enables the trader to know the long and the short position. At the same time, the ask price and the bid price helps the trader to know the spread. All you need is an account and cash to invest.
There are several factors to consider, economic factors of the country you are trading, position of the country and the politics of that particular country. It is also important to know how to check changes in value of two currencies using the pip measures. This helps to know if your account is increasing or decreasing in value.
Another factor is that, one has to be careful on the brokerage market to trade on. This is by involving some other people who have been in the market for at least nine years. This increases the brokers honesty and transparency. Most important is that if a broker offers commodities and securities it is obvious that they have a wider business and client base. This is based on the number of commodities offered by the broker.
Also, one need to be careful on the reviews posted on different sites because some may not be true. They may be posted just to boost their reputation. Therefore, a lot of concern must be raised to these reviews. At the same time, the links and the sites should look professional and be active through out.
Basic things like the customer support, accountability, transparency and easy transactions must be clearly analyzed. For example, look at the transaction cost for each trade.
One may choose to open a personal account or a managed account. A managed account allows some one to execute trade on their behalf. The broker applies for the account online or fills a PDF document. The cost of transferring cash from the bank account to the brokerage account should be minimal because this fees cuts down on profits. Intermediaries like Pay pals and wire transfers may be preferred because they charge low fees.
Finally when one starts to trade, analysis of the market must be done. These are the sentiment analysis, fundamental analysis and technical analysis. They determine your margin, the place to order and also a careful analysis of profits.
