Lesson #2: Investing in Forex Trade: The fastest way of making money.
If you are new to forex trade, your first question will definitively be:
What actually is Forex Trading?
The Forex Trading Market is a form of exchange that is based on trading different national currencies. This might seems difficult at first but it is actually a quite easy concept if approached the right way.
You can also look at Forex Trading the following way:
- I invest on a currency that I believe it will go up and therefore I buy (go long) in order to sell high.
- I invest on a currency that I believe it will go down, and therefore I sell (go short) on this currency in order to buy low (the concept of short, which we will analyze more deeply in another article, refers to investing on something decreasing its value from the current point in time).
Said like that, this might look very easy, and it actually is. With the right amount of training, which you can develop through the use of PaxForex Free Demo Account which will give you the opportunity to simulate trading on the real market without investing real money, you will start to gain more knowledge and start to feel more comfortable with forex trading.
The main concept you need to practice on is to understand which factors can influence the value of a currency, for example Euro, against a second currency, for example the United States Dollar. This relation, expressed as EURUSD, will vary different times over the day and therefore you need to understand the best moment of entering the marketing and make a profit out of your investment.
- Enter the market when the Euro is at its lowest level (your entry point is technically defined a Pivot Point).
- Exit the market when you think the Euro is at its highest (your exit point is also called Pivot Point).
This simple concept can be defined as a Forex Strategy and the use of your PaxForex free demo account should be aiming to creating effective personal strategies to implement in the real forex market.
Once we answered the first question, it is natural for new forex traders to ask a second and more important question:
I understand that Forex Trade can represent a great source of revenue, but what about my potential loss?
This is a natural worry of every new trader. PaxForex cannot guarantee you a certain profit, but we do assure you that you can never lose more than you invest. Actually we offer Investors the opportunity to trade 500 more times than your real investment. By doing that, you can earn more exponentially more than what you invest but still limit your risk to the initial investment.
How do we do it?
We use the concept of leverage, which will be better introduced further in our guide to become an expert Forex Trader.
Do you want to exercise what you just learned?
Open your Free Forex Demo Account now and contact us if any question comes up!