This enables you to trade money that you don’t have, in hopes that you’ll make even more money from the trade and be able to repay the broker with your earnings. Using leverage means borrowing money from your broker in order to execute trades. See all details Is forex trading risky? What kind of returns can you get?įorex trading is generally regarded as high risk. It also means you can lose money in your sleep. That means you can literally get up and trade currency any time of the day. There is no close of the trading day, nor do you have to worry about the trading hours of various time zones.
However, unlike stock trading, there is generally no other commission.Ĭompared to, say, buying blue chip stocks, buying and selling forex tends to be a lot more fast-paced, and investors hold on to their currencies for shorter cycles and monitor the market more closely.Īnother key difference is that the forex market stays open around the clock. Each time you execute a trade, you will have to pay the “spread”, which is the difference between bid and ask prices. Investors watch the fluctuations in exchange rates between various currency pairs, and jump in when they think there’s a chance to buy low and sell high. People generally trade forex in currency pairs, such as USD/EUR or USD/SGD. But the most practical way to do so is on an online platform with the help of a licensed broker. Technically, so long as you’re buying and selling currency in order to turn a profit, you’re forex trading. But things are a bit different when you’re forex trading.
So, everyone knows that to change money, you just need to head to a bank or money changer. How does forex trading work as an investment? Forex trading plan – how do you make one?.Is forex trading risky? What kind of returns can you get?.How does forex trading work as an investment?.DBS, StarHub, Keppel Corp, Apple, Facebook and Rio Tinto
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