Wednesday, April 13, 2011

Huge Forex Profits even from Small Investments

Historically, traders would need several thousands of dollars to be able to trade. Thanks to the ever increasing competitive nature of currency trading online this has been reduced so far that an individual can now begin trading a mini Forex account with as little as $25.

With the often huge leverages on offer even such a small amount can produce considerable returns.

Forex trading is forever increasing in popularity due to the many benefits it offers and more and more trading resources becoming available online.

The Internet is a wonderful thing and when you combine it with the magic of Forex trading you suddenly have an amazing and exciting hobby or profession right in front of you.

Click the next button below to read more about the amazing earning potential trading currencies online can offer you no matter what the level of investment is that you have to put forward.

Online Forex Trading Advances

Of course when Forex first began the Internet was a distant dream and therefore trading was carried out exclusively by the cash rich worldwide organizations.

These were companies who could afford to throw a few million in to the mix in an attempt to make some big money trading currencies.

Trading was carried out over the telephone via several exchange centers all over the world. A trader would monitor global activity and then ring their broker in order to commence or complete a trade order.

The transfer of funds to complete trades was done through bank transfers which often took a few days to go through. This meant that whilst the Forex market offered a fantastic earning opportunity, trading was both time consuming and a hassle.

With the advent and then increasing popularity of the Internet, Forex trading online opened up the doors to millions of people who had never previously had the resources to take part.

Gone are the days of having to phone through your intended trade, Credit and Debit cards are even accepted with some online brokers for depositing funds. Even more recently the Forex market has opened up to individual traders even with very small amounts to invest.

The Birth of the Foreign Currency Exchange

In 1971 when floating exchange rates began to materialize and the bretton woods agreement was abandoned, the foreign currency exchange market was born.

This advancement was welcomed with open arms by the International companies who had often noticed big profit changes both positive and negative simply based on the value of their native currency against the value of the currencies in the markets in which they traded their day to business activities.

These companies would see fluctuating exchange rates effect their profit and loss accounts, often with millions being made or lost simply on the value of one currency against another.

It was also these companies that were first to spot the huge money making opportunity currency fluctuations offered and these same companies were the first to leap on to the Forex trading bandwagon and attempt to increase their profit margins through brave yet profitable currency exchange decisions.

A History of Trading the Forex Market

Forex currency trading has made massive advancements over recent years and is becoming on the Internets most searched for trading opportunities.

Technological advancements have made Forex an opportunity to make money for everyone from small individual speculators to large multi-national companies.

In reality the principles of Forex trade have existed for centuries but it wasn't until 1967 when the idea of a global system of currency exchange first began to be put together.

A college professor named Milton Friedman famously wanted to take a bank loan in Pounds Sterling (feeling that the currency was overpriced against the dollar) and then sell it before buying it back once the price against the dollar had fallen.

This would allow him to repay the bank and pocket a nice profit for himself. His loan application was declined due to the bretton woods agreement that was in place at the time but this set the wheels in motion for worldwide Forex trading.

Forex daily

While thousands of people trade in Forex daily, some still wonder - what is Forex trading?

In short, it's buying and selling currencies - or money, if it sounds better. Imagine that you live in Great Britain. Your friends tells you he is going to the US next week for vacations and therefore he requires some American money. Obviously, in the US no shop would accept British pounds.

Luckily, you have some dollars left from your last business trip to New York, so you take your wallet, get twenty banknotes of 100 USD and sell them to your friend. Obviously, he pays you back with British pounds - because you live in London, you are not interested in any other currency.

Well, you have just made a forex operation! Now, imagine that instead of taking British pounds from your friend, you ask him to give you back the same amount he received - 2000 USD, to be accurate. At this moment, the exchange rate was 1.4282, let's assume. He spends two joyful weeks in the US, traveling around the states, tasting some delicious stakes with Californian wine and even singing local anthem. Then your friend comes back to London and he has to give you back 2000 USD. Luckily, the exchange rate of US dollar versus British pound has increased dramatically due to some latest news from the US - it's 1.4021 now, meaning US dollar is now more expensive in the UK! So, once you receive 2000 USD back, you go to a currency exchange window at your favorite bank and change dollars back to pounds. And then - surprize, you made a profit because of the currency rate fluctuations!

Now, you actually did some primitive form of forex trading!

Nowadays, there are more sophisticated and high-tech ways to do forex trading rather than selling currencies to your friends and fellows. You can open an account with a forex broker and start trading online - from any place in the world, with tens or hundreds of different currencies! And thanks to leverage - automatic "credit" system, your profits can increase ten times or even one hundred times!

So, why waste time, why not start live forex trading right now! Forex4you will be glad to assist you with any queries that may arise throughout the process!

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