Thursday, February 26, 2009
Brokers
Commercial Bank
Why Forex And How To Make Money From it ?
What is traded in the forex market? The simple and straight forward 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 like EToro, and are traded in pairs; for example the euro and the US dollar or the British pound and the Japanese Yen.
The Forex market is considered an Over-the-Counter or 'Inter bank' market. This is due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period.
Until 1990, the minimum requirement to open a forex trading account ranged from $ 10 million - $50 million. It was only intended to be opened for bankers and large financial institutions. Due to the rapid growth of internet, now these large financial institutions are offering retail accounts to us.
Our broker eToro is one of them. Their institution is called "retailfx" and one of the largest in the industry. They are regulated by all the relevant financial authorities through out the world and they have the capacity to offer us a retail trading account with a minimum deposit of $50.
Why FOREX?
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 clearing fees, no exchange fees, no government fees, no brokerage fees. Brokers are compensated for their services through something called the bid-ask spread.
A 24-hour market.
The Forex market never stops. (Expect for weekends.)
No one can manipulate 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.
Super High Liquidity.
Because the Forex Market is so huge, it is also extremely liquid. 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 practice” Accounts, News, Charts, and Analysis.
Forex brokers like our eToro offer 'demo' accounts to practice trading, along with breaking Forex news and charting services. All free!
These are very valuable resources for traders who would like to improve their trading skills with 'play' money before opening a live trading account and risking real money.
Low entry requirements.
As I said early, now days you only require $50 to start trading. Other than that you only need, A computer with a speed internet connection and eToro forex trading platform.
How you make money from forex trading?
When you do a forex trade, it means you buy a currency in exchange for another, hoping that the currency you bought will increase in value.
For example,
You bought 10,000 Euros at the EUR/ USD exchange rate of 1.80
In other words, you acquired 10000+ Euros at the expense of -18000 USD.
For example,
You bought 10,000 Euros at the EUR/ USD exchange rate of 1.80
In other words, you acquired 10000+ Euros at the expense of -18000 USD.
One hour later, you trade back your Euros back in to US dollars at the EUR/USD rate of 1.90
Which means you gave back 10000- Euros and gained back 19000 worth USD.
Your profit is ( 19000-18000= 1000) Thousand dollars.
Buy : EUR 10000*1.8 = 18000
Sell : EUR 10000*1.9 = 19000
Profit :1000
How To Withdraw Money From My Forex Trading Account?
The process here is also straight forward and very simple. You should not have any doubts about your broker as they are regulated by all the required rules and regulations. If you have a positive balance in your account, you can withdraw it without any problems.
If you deposit funds via a credit card, you can withdraw back to the same card. If you deposit by paypal you can withdraw via the same method. The same scenario applies with other funding methods.
Most people do not know that their credit cards can be used as a method of receiving payments. If you have a visa credit card , eToro will send your winnings back to your card. You can withdraw it from your nearest ATM machine. Since the funds will be sent as a credit to your account there will not be any interest or fees from the credit card issuing bank.
If you do not have a visa credit acrd ,you can deal easily if you have a moneybooker’s account. It is free to open and they will send funds directly to your bank account within 5 business days. In order to withdraw money via “Moneybookers” you have to use them when funding the eToro account.
If your credit card is Amex or mastercard this is the easiest option for you. Moneybookers is my favorite payment processor and I have used them countless times in my drop shipping business.
If you deposit funds via a credit card, you can withdraw back to the same card. If you deposit by paypal you can withdraw via the same method. The same scenario applies with other funding methods.
Most people do not know that their credit cards can be used as a method of receiving payments. If you have a visa credit card , eToro will send your winnings back to your card. You can withdraw it from your nearest ATM machine. Since the funds will be sent as a credit to your account there will not be any interest or fees from the credit card issuing bank.
If you do not have a visa credit acrd ,you can deal easily if you have a moneybooker’s account. It is free to open and they will send funds directly to your bank account within 5 business days. In order to withdraw money via “Moneybookers” you have to use them when funding the eToro account.
If your credit card is Amex or mastercard this is the easiest option for you. Moneybookers is my favorite payment processor and I have used them countless times in my drop shipping business.
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