An Introduction to Forex Trading for Mobile Entrepreneurs
Generating profits as a location independent business owner is great, but you need to understand how to secure and grow that profits through various investing and trading methods. One of the most popular ways is through currency or forex trading.
Once a practice utilised primarily by major banks, currency trading has become a viable and profitable option for individual traders thanks to the advent of the Internet and digital trading. Trades can be conducted in real time, prices are updated live, and markets exist not only with the main banks but also with brokers and other investors that make up secondary markets.
101’s
Currencies are essentially traded in pairs, so that the investor buys an amount of one currency using another currency. In a USD/GBP pair, traders use dollars to buy pounds, or vice versa, and aim to take advantage of the strengthening of one currency or the weakening of another, in relation to the other currency in the pair. Traders are, effectively, trading on the performance of a currency, or the economy that that currency belongs to.
Although stock trading remains popular, especially for medium- and long-term investments, the foreign exchange market is considerably larger; has fewer trading options, enabling greater specialisation; enables trading 24 hours a day; and platforms like ETX Capital offer stop losses and other tools to help manage risk and reward.
The liquidity of the Forex market is what it makes it such a popular trading option. While it can prove difficult to find buyers or sellers of stocks and securities, it is considerably easier to enter or exit a trading position in the highly liquid foreign exchange market.
This liquidity also means that there are tight spreads offered, especially with the major currency pairs. The spread is the difference between the Buy and Sell price of a currency pair, and it also represents the profit that brokers and the market takes. It is common to find brokers and platforms that do not charge any commission. While banks may offer a spread of 1,000 pips, the Forex market can offer spreads as low as 5 pips on major currency pairs.
Online currency trading
The advent of the Internet means that you do not have to be a government, a financial institution, or a major buyer in order to invest in foreign currency. The Forex market means that you can access considerably tighter spreads than are provided by banks and currency conversion services, and by utilising the tools, access to data, and charting software that are included with your trading platform and on various websites, you can forge your own trading strategy that is designed to determine and to drive your foreign exchange trades.
So, it’s a match made in heaven: You are already utilizing your mobile devices and the Internet connection for your business purposes. Take those resources a step further, and start accommodating currency trading.
About the Author
Ivan Widjaya A mobile entrepreneur who loves to work anytime, anywhere he wants. He runs several popular business blogs, make money online and live a geoarbitrage lifestyle. He typically works at home and travel with his family when he wants to, often without his business.
