3 Ways To Make Money With Forex Investing

FinanceStocks, Bond & Forex

  • Author Igor Borznik
  • Published January 6, 2012
  • Word count 404

Forex trading can be hugely profitable for those who know what they are doing. Here are 3 strategies to consider when first starting this kind of investing:

Software

There is a ton of forex software on the market that investors are using to make their trades for them. This is a great option if you have a full time job and simply want to make some money on the side. In most instances the ROI will be better than if you were to simply stick the money in a savings bond. However, the income potential is also lower than if you were to invest yourself. An educated human mind can always outdo a forex robot.

Short term trading

This is where you buy currency with the goal of selling it shortly after (usually within a few hours). The goal, of course, is fast profits. The reason that there are so many day traders in forex is that the currency market is open around the clock. Therefore, people can get out of work and then start trading.

Just be careful.

This strategy can be extremely dangerous if you do not know what you are doing. The key is to become good at reading price charts. For instance, if you notice that the price of a particular currency always goes up after a sharp dive, then you want to get in right when the price has bottomed out. The goal is to make small amount of money with each forex investment, and make as many trades as possible.

And make sure you find a good forex broker.

Since you are going to be making so many trades, you want to find a forex company that charges as low a fee as possible per transaction. After all, your margins are likely to be razor thin, and even a percentage point less can be the difference between success and failure.

Long term forex investing

This is the recommended route for most forex traders. It involves analyzing the country you are investing in. The goal is to find a nation that you believe is in good shape financially, but the currency is still selling for a lower price than what it should be. This strategy offers the best source of passive income of the 3 methods. Therefore, it is the one you should use if you want a long term strategy that makes you money whether you are there or not.

Igor Borznik works for borza Ljubljana, Slovenia. More on: forex trgovanje. Want to know more about forex?

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