Knowledgebase: Frequently Asked Questions
How does one profit in the Forex market?
Posted by Homi .M on 17 August 2012 03:36 PM
Obviously, buy low and sell high! Forex market is a place where profits can be made as well as losses.
Profits are made in the Forex market by anyone who trades currency and all you need for this is a computer, internet connection and some capital. It seems simple but to make great profits you have to be a dedicated trader who studies the market constantly and trades intelligently.
The trader has to be patient and correct in his decisions to earn profits. The profit potential comes from the fluctuations (changes) in the currency exchange market. Unlike the stock market, where shares are purchased, Forex trading doesn't require physical purchase of the currencies, but rather involves contracts for amount and exchange rate of currency pairs.
The advantageous thing about the Forex market is that regular daily fluctuations - in the regular currency exchange markets, often around 1% - are multiplied by 100! (FxGlory offers trading ratios from 1:100 to 1:3000).
A factor that allows traders to make money by trading is the concept of leverage. Depositing $1000 in order to buy a Forex contract with the value of $100000 a client needs "Leverage" at 1:100 ratio. $1000 is all you invest and all you risk, but the gains you can make may be many times greater.