How to make money on Forex
Forex is a global market where traders around the world buy and sell currencies. To make money, you trade in currency pairs. An example is the euro and dollar pair (EUR/USD).
But how do we make money on Forex? It’s the same as most trades. By following a fundamental principle: buy low and sell high. By purchasing a currency pair at a low price and selling it at a high price when the value rises, you can make money on Forex Daily.
For example:
You have $100 in your account, and you want to trade EUR/USD. The exchange rate is 1.25, meaning that for 1 Euro, you get 1.25 U.S. Dollars. Note that the exchange rates are like price tags and will change all the time.
Let’s say there’s news-making you believe that the Euro would rise over the U.S. Dollar. In preparation, you buy 80 Euros with 100 Dollars.
If your forecast was correct and the exchange rate rises to 1.35. This would mean that when you sell your 80 Euros for Dollars again, you will get 108 Dollars compared to the initial 100 Dollars.
This amount may seem meager, but the best way to make money on Forex is to make use of leverages that brokers provide which are funds you can borrow to multiply your deposit.
If you used the leverage of 1:3000 for the example above, you would get $2,400 instead. So, by investing $100, you can trade with as much as $300,000.
But when should you buy or sell? The answer isn’t reliable as rates are influenced by economic situations of the currency’s country (GDP, inflation, etc.). This means some guesswork must be done to a certain extent.
There are ways to make forecasts as accurate as possible; by basing your predictions on a combination of fundamental and graphical information.
Necessary information comes from global economic news. If you stumbled upon a story that, for example, tells us that the Canadian unemployment rate had fallen, selling USD/CAD would be a profitable option as this implied that the value of the Canadian Dollar could rise.
Another way is to refer to graphical information released. Patterns on exchange rate charts are significant indicators to the market’s direction.
With this, you now have the mindset and the tools to start and make money on Forex daily. Remember to keep in mind that high profits involve higher risks – so having proper risk management is critical to “survive” in the market and more importantly – make money.
How to make money on Forex without trading
As tempting as the idea can be, it is impossible to make any substantial profit without making investments. However, there are possibilities to do so, as many brokerage firms do offer promotions. Be cautious of scams and keep in mind that the profits earned may not be as common and/or significant as you would hope.
Trading without a deposit
Most brokers require an initial deposit before you can start trading. While you cannot withdraw this deposit, but you can purchase with it and if successful, would allow you to remove your profit. This option does enable a trader to earn on Forex without investing money. Note that this deposit is usually a promotion from the broker.
Affiliate programs
Another way to make money on Forex daily without trading is promoting a broker you have collaborated with to gain commission from the people you attract. This is the best way to make money on Forex without investing. Money earned depends on the terms and conditions of the broker. This can especially be useful if you have a blog or a website.
Contests
Some brokers organize competitions for demo accounts. The rules of these contests are relatively simple – involving you to come forward with other bidders, earning income on a virtual account within a given period, and as a reward, gain money on a real account. From here, you can start trading without investments.
Comments, reviews, and posts on information portals
Brokers sometimes reward interesting remarks on forums and opinion polls about Forex. This, in turn, means you can receive a bonus on your trading account as brokers are often prepared to pay big money for Forex reviews.
Hopefully, if you are lucky enough, these methods prove that it is possible to make money on Forex without investments. However, the chances can be rare as the best way to make money on Forex is to be familiar with the market as well as to have experience from trading in a real account.
