Can Foreign Exchange Trading Help you save for an Early Retirement?

Have you ever exchanged currency to go on a trip? If you have, whether you knew it or not, you were trading Forex.

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What is foreign exchange trading?

Foreign exchange consists of trading one type of currency for another. The foreign exchange market, also known as the Forex or FX market, is the world’s largest market, operating 24 hours a day, with enormous amounts of money, almost one trillion, traded on a daily basis. As investors become more knowledgeable the market continues to grow. Unlike other markets, the forex market has no physical location and no central exchange. It operates through a global network of banks, corporations and individuals trading one currency for another in an over the counter fashion. Unlike any other financial market investors can respond to currency fluctuations at the time that they occur, without having to wait for the exchanges to open. Access to modern services including news services, charting services, 24 hour dealing desks and sophisticated online trading platforms has allowed the forex market to explode, particularly for the individual trader. There is a massive reward potential for the successful trader, but you do have to keep in mind that every successful trade is balanced by a oss somewhere else.

How does it work?

Forex trading is typically done through a broker. As a forex trader you can choose a currency pair that you expect to change in value and place a trade accordingly. Orders can be placed with just a few clicks and the broker than then pass along the order to fill your position. When you close your trade the broker closes the position and credits your account with a loss or gain. This can all happen within a few seconds.

Getting started

Before jumping aboard the forex train it is probably a good idea to learn as much information about the market as you can. Research brokers to determine who you will work with. If you choose one of the bigger banks you’ll find they offer a wealth of knowledge to help you get started. In addition it is a good idea to get online and join forex discussion groups, forums and to read blogs. This will help you learn how to spot the market trends that will help you to be successful. A good place to start researching would be on a website like ForexCurrency.us. You can find a lot of useful information tools and tutorials on their website, as well as advice on choosing a broker and getting started.

Take Control of Your Investment: Trade Forex

Deciding on where to invest your money can be very tricky. There are a whole host of options available, some with more risk than others, and some offering much higher rates of return than others. Once you’ve given up your money to an investment product, there’s little more you can do to affect the outcome. This might be what some people want – to sit back and see what happens without having to think about it. For other people, a more hands-on approach might be better. You can in fact have total control over how you invest your money if you invest on the forex market.

Bull Market Wall Street

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The forex market centres around speculation on whether currency prices will rise or fall. Successful traders correctly predict the direction of a currency’s value, and profit from this from either directly trading the currency, or wagering money on the fluctuation. Signals which influence the decision to enter the market come from three main areas; news, fundamental analysis and technical analysis. The news is self-explanatory, fundamental analysis is general information about currency trends, and technical analysis is more complex indicators gleaned from charts and data.

There is a great deal of control when you trade forex because you can deposit as much or as little as you like at any given time, and you can trade as frequently as you want. If you see a particular opportunity then you can go for it; it’s your decision. With other investments, you can split up your capital among several options, but you don’t get anywhere near the same flexibility. Forex is accessible through an online platform provided by a broker.

Forex is one of the few investment opportunities which are not overly limited by the amount of capital you have at your disposal. You can trade with very little – many use forex as a source of additional income. In addition, anything you do put in can be amplified using leverage. This means you can maximise any profit you make, though you must remember it can also increase losses.

The potential returns are also very high. People can make many thousands a year without having huge portfolios. There are of course inherent risks when you trade on the financial markets, but they can be mitigated with intelligent trading, and tools such as the stop-loss. Most investment products offer only a few per cent a year ROI, but FX returns can be as high as around 20%. Many people make their entire living from trading forex, which goes to show just how lucrative it can be.

If you’re considering your investment options, then forex trading is certainly something to investigate. It’s very different from other opportunities, and it won’t be for everyone, but it does offer some significant advantages. If you want to benefit from having complete control over how your money is used, when it’s used, and at the best rates of return, then visit Alpari.co.uk to find out more on forex trading or to set up an account.

 

The Basics of Investing

Before becoming serious about investing, it is important to handle some other financial basics first, such as establishing an emergency fund and paying off high-interest debt. If you have already done that and are now looking to learn about investing, you may be confused by some of what you’re reading. Here are a few basic pieces of information that should help you navigate all of your research:

What is Investing? Investing is defined as, “Expending money with the expectation of achieving a profit or material result by putting it into financial schemes, shares or property, or by using it to develop a commercial venture,” but, in short, it simply means that you are putting your money somewhere in the hopes of earning more money by doing so!

Who should invest? As mentioned, if you have taken care of the basics with regard to your financial matters, you may want to look into investing because it will give you a chance to grow your money at a rate that outpaces inflation, especially if you are looking at a long period of time.

What are some types of investments? Some common investments include, though are not limited to, savings accounts, bonds , stocks and real estate. In the case of a savings account or a bond, you are lending your money to a bank, company or government, and they are paying you interest for the privilege of borrowing it. In the case of stocks or real estate, you are buying something (either a piece of a company or a house or building) and hoping that that purchase rises in value over the course of time that you own it.

Can I lose money when investing? Yes, as many investors learned in 2008, you can certainly lose money. There are a variety of investment products and some carry more risk than others. For example, a savings account is typically a very low-risk investment. You will not make a great deal of money with it, but you will not risk losing your money. The price of a stock changes daily, and you could lose quite a bit of money in a short time if something happens to the company whose stock you own. However, by the same token, you may make a good deal of money if the company does very well.

You may decide to do research on your own or consult a financial adviser, but because you are usually putting your money at some sort of risk level, you should always make sure you are comfortable with whatever investment plan you put in place.

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How Much Risk is Involved in Spread Betting?

There is no kind of spread bet, or any kind of financial trade for that matter, without an element of risk. However, this risk can be minimised by putting everything you can into every trade that you enter. The approach that smart traders take is to adopt a somewhat fearless approach to the market. However, this lack of fear is based on the fact that they have calculated the risk being taken with each transaction, giving them cause to be confident.

On the other side of the coin, there are a number of investors who fear taking even the slightest risk. You can’t enjoy playing the game, however, if you are only playing at an inch-by-inch level and will greatly limit your profit potential.

So there are a few aspects of trading which need to be grasped in order to make intelligent decisions, ensuring that you only take risks when the odds are truly in your favour. Some of these aspects are based around diversification of your portfolio.

Diversifying your investment portfolio is among the most essential and basic things that you can do if you wish to protect your gain, profits and the investment itself. It may look or sound easy at first glance but implementing this strategy can be tedious. This is due to the fact that there are some qualifications needed if you want to make the most of the diversification of your portfolio. With spread betting, for example, it could mean that you put a position on instruments or assets that are entirely unrelated. This requires that you spend some time investigating if your underlying assets are unrelated in any way to the asset being traded on.

Also essential are the appropriate and proper risk management strategies when it comes to financial spread trading. One of the more popular types of tools that can be implemented are limit orders or stop loss orders. Stop losses work in that they are implemented at a certain price and should the market reach that price; the order is then regarded as being a limit order. Therefore, they regulate or limit the amount that can be lost on a trade. For example, should an investor enter a trade at £400, he may wish to place a stop loss order on £3,950. He is essentially speculating the commodity in fifty points or less and if the price falls below that amount, he exits the trade and limits the loss.

Cantor Index provides an opportunity, via its trading platform, for you to make your first foray into financial spreads. Belonging to the Cantor Fitzgerald Group and regulated and authorised by the Financial Services Authority, they are among the more established and experienced trading firms. They are genuinely passionate about trading which is revealed through their knowledge and experience, and are willing to help their customers to make the most of the tools available and succeed in spread betting. These tools include live streaming charting, market news and market analysis, each playing their part in placing the odds in your favour.