Here's the question of the hour: If one is a sophisticted trader, how much risk is he or she willing to assume in trading in FOREX? If one is a relatively sophisticated investor, FOREX trading can be attractive for both investment and risk distribution.
FOREX trading, or Foreign Exchange trading, offers the most liquid marketplace in the world, and represents one of the key areas for non-US investment to occur. One can find FOREX traders on a 24 hour per day basis from Sunday to Friday; there are always investors willing to trade pairs of currency higher or lower, depending on a variety of factors.
What exactly do FOREX traders trade? FOREX requires that a trader swap of a pair of currencies--not a single currency.
This might be, for example, what are classified as the "majors" or trading US Dollars for Euros, US Dollars for Japanese Yen, or any of a variety of pairs. The currency combination, or cross, necessitates the buying of one currency and the selling of another.
In many ways, this is not for the faint hearted or inexperienced trader. Professionals sometimes find the market rewarding, but more often, find the market challenging.
FOREX Trading is volatile; since it´s a very liquid investment, the FOREX Interbank Market trades up to $ 3 Trillion Dollars a day, and the most important FOREX market is the "spot" market, which trades and settles within two business days.
Think about $ 3 Trillion Dollars changing hands and all those transactions settling between traders within 48 hours. The FOREX trading standard for clearance is two business days.
FOREX is attractive to traders for a variety of reasons:
a) One can make significant money in the FOREX market quickly—at a higher risk.
b) One can generally find traders with whom to trade via online.
c) True traders/businesspeople recognize the risk, and how the risk involved drives the penchant for trading higher and higher, and the accepted tolerance for risk higher, while driving the "pain impact" lower on losses incurred. Traders jokingly refer to it as a "Traders High" and compare the physical impact to that incurred with some drugs.
d) Online offshore investment funds offer ways for Ex-US traders to redistribute significant wealth; i.e. make serious money quickly; and, on smaller sums than normally targeted in equities or real estate trading.
e) Margin limits are often lower, meaning that more money can be traded above the level of funds held in reserve for trading. Some traders trade up to 100:1 on margin. This means that a U$D 10K investment can leverage up to $1Million Dollars in trading margin. Truly adventurous, highest risk traders go as high as 400:1 on up to $1 Million Dollars.
Think of an excessive level of margin trading in FOREX as similar to the US Government spending money it doesn´t have, to buy things it might not even need, at prices it probably shouldn´t pay.
The key to successful margin trading is keeping the margin in balance, and making sure that you stop your losses quickly. It´s easier said than done. Several funds are growing exponentially, however, and most are offshore US funds. Funds domiciled in the Bahamas, St. Kitts and Nevis, the Cayman Islands, or in several of the Central American countries, including Panama, are becoming more and more popular with non-US investors. The payout to be received can be significant.
In a quick overview of offshore funds available, FOREX payouts on U$D 25K investments currently range from 17% annually to as much as 28% on a year over year basis; such payouts attract many pensioned employees, former professionals including Doctors, Dentists, Teachers, etc. who seek higher returns and are not risk averse—that is, they are willing to take risk to receive higher percentages of payout. Where are these investors coming from? Investors in offshore funds come from both Western and Eastern Europe, from the Middle East, and from Asia. Some investors are coming from Africa, and a limited number from Oceania.
One asks, however, how is money actually made in FOREX?
Money in FOREX is made because the value of currency constantly changes in position to other currencies. Dollars rise and fall in relation to the value of the Euro. A trader would take a position on the dollar increasing in value and the Euro declining in value. Even in a market where the value of a currency is declining, someone will make money and someone will lose money. Think of money as having a relative value to everyone else´s money, and that value will go up or go down in a redistribution, someone on a "contract" will either "make" money or "lose" money. Theoretically, if a trader loses money when the market turns one direction, he or she will make money when it reverses itself.
How much the currency moves on a daily basis is impacted by a variety of different factors—not always clear to the FOREX trader. Political turmoil, financial turmoil, bad economic indicators, the flight of capital from one country to another can have significant impact on the price/value of a country´s currency,
Many smaller investors are now testing the waters to become active FOREX traders with accelerated and digitized tracking programs. Higher returns, higher margin limits, and opportunities for significant ROI await those with an active understanding of the FOREX market.
FOREX trading, or Foreign Exchange trading, offers the most liquid marketplace in the world, and represents one of the key areas for non-US investment to occur. One can find FOREX traders on a 24 hour per day basis from Sunday to Friday; there are always investors willing to trade pairs of currency higher or lower, depending on a variety of factors.
What exactly do FOREX traders trade? FOREX requires that a trader swap of a pair of currencies--not a single currency.
This might be, for example, what are classified as the "majors" or trading US Dollars for Euros, US Dollars for Japanese Yen, or any of a variety of pairs. The currency combination, or cross, necessitates the buying of one currency and the selling of another.
In many ways, this is not for the faint hearted or inexperienced trader. Professionals sometimes find the market rewarding, but more often, find the market challenging.
FOREX Trading is volatile; since it´s a very liquid investment, the FOREX Interbank Market trades up to $ 3 Trillion Dollars a day, and the most important FOREX market is the "spot" market, which trades and settles within two business days.
Think about $ 3 Trillion Dollars changing hands and all those transactions settling between traders within 48 hours. The FOREX trading standard for clearance is two business days.
FOREX is attractive to traders for a variety of reasons:
a) One can make significant money in the FOREX market quickly—at a higher risk.
b) One can generally find traders with whom to trade via online.
c) True traders/businesspeople recognize the risk, and how the risk involved drives the penchant for trading higher and higher, and the accepted tolerance for risk higher, while driving the "pain impact" lower on losses incurred. Traders jokingly refer to it as a "Traders High" and compare the physical impact to that incurred with some drugs.
d) Online offshore investment funds offer ways for Ex-US traders to redistribute significant wealth; i.e. make serious money quickly; and, on smaller sums than normally targeted in equities or real estate trading.
e) Margin limits are often lower, meaning that more money can be traded above the level of funds held in reserve for trading. Some traders trade up to 100:1 on margin. This means that a U$D 10K investment can leverage up to $1Million Dollars in trading margin. Truly adventurous, highest risk traders go as high as 400:1 on up to $1 Million Dollars.
Think of an excessive level of margin trading in FOREX as similar to the US Government spending money it doesn´t have, to buy things it might not even need, at prices it probably shouldn´t pay.
The key to successful margin trading is keeping the margin in balance, and making sure that you stop your losses quickly. It´s easier said than done. Several funds are growing exponentially, however, and most are offshore US funds. Funds domiciled in the Bahamas, St. Kitts and Nevis, the Cayman Islands, or in several of the Central American countries, including Panama, are becoming more and more popular with non-US investors. The payout to be received can be significant.
In a quick overview of offshore funds available, FOREX payouts on U$D 25K investments currently range from 17% annually to as much as 28% on a year over year basis; such payouts attract many pensioned employees, former professionals including Doctors, Dentists, Teachers, etc. who seek higher returns and are not risk averse—that is, they are willing to take risk to receive higher percentages of payout. Where are these investors coming from? Investors in offshore funds come from both Western and Eastern Europe, from the Middle East, and from Asia. Some investors are coming from Africa, and a limited number from Oceania.
One asks, however, how is money actually made in FOREX?
Money in FOREX is made because the value of currency constantly changes in position to other currencies. Dollars rise and fall in relation to the value of the Euro. A trader would take a position on the dollar increasing in value and the Euro declining in value. Even in a market where the value of a currency is declining, someone will make money and someone will lose money. Think of money as having a relative value to everyone else´s money, and that value will go up or go down in a redistribution, someone on a "contract" will either "make" money or "lose" money. Theoretically, if a trader loses money when the market turns one direction, he or she will make money when it reverses itself.
How much the currency moves on a daily basis is impacted by a variety of different factors—not always clear to the FOREX trader. Political turmoil, financial turmoil, bad economic indicators, the flight of capital from one country to another can have significant impact on the price/value of a country´s currency,
Many smaller investors are now testing the waters to become active FOREX traders with accelerated and digitized tracking programs. Higher returns, higher margin limits, and opportunities for significant ROI await those with an active understanding of the FOREX market.
_Picture.GIF)
