What is Forex and How to make money with Forex

What is Forex and How to make money with Forex - basics and introduction

In Ideas on how to become rich, we have covered all sorts of money, finance and investment topics ranging from investment basics, to fundamental analysis and technical analysis, CDs, mutual funds, savings and bonds, making money online and getting a good, high paying job, all as ideas on how to become rich by making money.

In the next few posts, I will be dealing with a topic on foreign exchange (forex) and how to make money with forex, and ideas and concepts related to forex. This will get a bit technical, just as it did with the technical analysis part of my writing (no pun intended).

In this post I will be dealing with the basics: what is forex?

In the forex market, what we are doing this time is buying and selling currencies. The goal is still to make money, just the same as investment in stocks and shares and all other financial devices and financial instruments. The object of forex trading is to make money by the buying and selling of currencies, so the key idea is that first you have to exchange one currency for another currency, and then later convert the second currency back into the first, so as to make yourself a profit.

This is because currencies fluctuate, due to many factors, such as economic factors (macroeconomic factors such as balance of payments, inflation, economic growth and others), political conditions, and basic human psychology (the same factors here that affect the stock market and capital gains and losses).

I would say that if you know how to invest in the stock market, picking up forex will be rather easy and a smooth ride for you because there are many similarities between stocks and forex. You will be happy to know that the fundamental analysis and technical analysis skills and concepts that you have learnt or can review in my earlier posts will come in really handy, because there are also two main approaches to trading currencies, and they are, yes you guessed it: technical and fundamental analysis.

However, of course, there are fundamental differences and dissimilarities in technical aspects of forex, which will be dealt with in the course of this Ideas on how to become rich blog.

The reason why I personally think that forex is a bad idea is that it requires monitoring and there are many variables to consider. Monitoring is that you need to have access to data and information, and despite the fact that economics says there is perfect information, there really is no such thing as perfect information. In addition, there are many variables to consider, and many are out of your hands. That is why I strongly prefer stocks and shares to forex. However, if you are good at analysis, and like numbers and math, forex will be very good for you because forex is just the kind of thing that might make you a lot of money. Information and research are key, and if you like doing tracking and investigation, as well as monitoring and evaluating data and prices, forex might turn out to be the correct idea to make you very rich.

More to come on forex on Ideas on how to become rich. Stay tuned!