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Main Page » Investment & Finance » Forex Trading
 

High Living through Plain Thinking

 
Author: Michael Kerr
 

Gone are the days when people would be satisfied with plain living and high thinking. This is an age when everyone wants to achieve high living with a little bit of plain thinking, or even betterwith no thinking at all. And most of the time, it doesn't work out.

You would rather spend your time on the couch, in front of the plasma TV showing your favorite movie, with not a care in the world to disrupt your enjoyment, while someone else takes care of how to make your rich. Sounds good, eh? Really, who wouldn't want that kind of a lifestyle? But that isn't the way things happen in the real world do they?

Or maybe they do. Notice that I said it doesn't work most of the time. I didn't say it never works. For sometimes maybe it does.

What am I talking about? Is it some kind of hidden, poorly publicized, only-for-insiders, high-entry-barrier, niche type of business? For where else can this kind of thing happen with nobody knowing about it?

Not really. It isn't a niche business, no sir. Not by a far margin.

Because I'm talking about the largest market in the world. Yes, unarguably, positively, indisputably the largest. It's larger than the businesses of Microsoft, AOL and General Electric put together and then tripled. You know what I'm talking about, don't you?

Let's cut out this beating around the bush. I'm talking about foreign exchange trading, or forex trading as it is known briefly. It's a stupendously huge market, with worldwide daily trades often reaching or even exceeding a level of 2 trillion dollars. That is 2 followed by 12 zero-s.

The greatest traders on this market are national governments of countries around the world, huge multinational corporations, the central banks of many countries, the richest tycoons in the world, and so forth.

And the strangest thing about all this is even you and I have a chance to make money on that market. In a minute, we shall see how.

How does forex trading work, and how do you make money off it? Well, you know how the many monetary currencies of the world rise and fall every day, and their exchange rates against each other vary regularly? That's the effect you use to make money. Suppose you buy a hundred dollars worth of Euro, when the price of Euro is not so high. Suppose you get 90 Euros for 100 dollars. However, after you buy them, the price of Euro rises, and soon 90 Euros become equivalent to (say) 110 dollars. So you sell them back and get into dollars again, only 10 dollars richer than when you started! This is the essential principle of forex trading. Child's play, isn't it?

Except that it isn't. For one thing, that was only an example. The forex market doesn't really rise or fall so sharply. Most changes are well below 1% for a single day. So if you invest 100 dollars in the morning, you aren't likely to see much more than US$1 in profits before going to bed. So given your meager capital, how are you going to make any money at all?

The answer to that one is known as leverage.

The other problem is, how do you know which currency to buy and which to sell? It seems to be a devilishly tough thing to learnyou'd need years of time and thousands of dollars in money to perfect your technique.

You're right, but there's a solution to that too. It is known as automated leverage.

So you want to make money in the forex trading market, because you've heard it's extremely profitable, and it's by far the largest market in the world. But you're stumped after learning that with the kind of capital that you can invest, your profits would be negligiblethat is, if you can make any profit at all. If you average out the maximum price fluctuations that single-day trading that the forex market sees, you'll find that this is around 1% or less. Which means that if you start the day with a capital of one thousand dollars, at the end of a good day you aren't likely to see much more than 10 dollars of profit. And on bad days not even that. Not really something out of which you can make a living, is it?

The answer to that is something called leverage.

What is leverage? When you borrow a large amount of money from a forex broker against the equity or hard capital you invest, and use this much larger amount to become a profitable player in the forex trade market, you are leveraging your capital for greater gains. There are many brokers who would gladly lend you up to as much as 200 times your original investment.

What does this entail? Suppose you enter the market with a one thousand dollar investment. If you use leverage, you shall be able to trade forex from a position of as high as two hundred thousand dollars! Which means, of course, that all profits you make will be 200 times larger than what you would have made using only your own money. On a fair day of trading, therefore, you stand to gain US$2000 in profits, having started only with your meager one thousand dollars! Nice thing, leverage, eh?

Not always, though, remember that leverage magnifies not only your profits, but also your losses. Without leverage, on a day of wrong decisions you could lose only ten dollars. With leverage, you stand to lose your whole initial capital. You could lose more, but there's a system of limiting losses that cuts it off at the limit of your own money, and gives the rest back to the broker.

What if there were a system whereby you could use the power of leverage to make profits, and profits only, because your investments are being guided by an automated system that was made by vastly experienced professionals who have been trading forex for years, and know the ins and outs of the market? Does it sound too good to be true?

But it really exists. All you have to do is open an account with a forex broker, download a particular piece of software and install it on your computer. It's a matter of five minutes or less. And that's where you can retire from the harsh world of business, and let the computer make money for you, by trading through the internet. Your leverage has just been upgraded to a bigger, better, safer and more profitable system called automated leverage. Your money is being multiplied by an expert who has devoted vast amounts of time and money into learning the game. And the best thing is that your computer, guided by the automatic trading system, makes the exact same decisions for buying or selling as the expert does. He makes money if you do, if not then not. So he has a personal interest in seeing your money grow.

So what are you waiting for? Here's a link to one of the finest automated leverage systems around. Click on it, and five minutes later you can go and turn on that plasma TV.

 
 
 

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