Now that we've reviewed basic terminology, let's look at some of the differences between trading stocks vs. currencies. In currency trading you are always comparing one currency to another so forex is always quoted in pairs. Sometimes authors of currency research will refer to only one half of the currency pair. For example if an article is referring to the euro (EUR) trading at 1.3332 it's assumed the other currency is the U.S. dollar (USD).
The basic mechanics of trading the forex market are similar to any other market. Buy low and sell high in the hope to generate a profit. Due to its unique characteristics, the forex market provides a wide range of trading opportunities that no other market does. The forex market, therefore, is very suitable for the novice trader that is looking to either make an extra income or a full-time trading career.
There are many forex brokers out there; you will get the good, the bad and the very ugly. Choosing a suitable broker is indeed a daunting task. The sweetly-worded and glamorously designed sales pages have conspired to make this so. You need to be able to sift the wheat from the chaff so your requirements are met and safety of your funds guaranteed.
Hi - my journey into the financial markets was prompted by a desire to make sense of the jargon filled replies I usually received when asking any financial adviser, the simplest of questions. Clearly they believed as a mere woman, I was incapable of understanding the complexities of the markets. This prompted my desire to learn, and since then I have been involved in every aspect of trading and investing for over seventeen years. Now at last, I have the luxury of time, to devote the next phase of my life to writing a series of books with one aim. To explain complex subjects and concepts surrounding the financial markets, in a clear and simple way. I actually began my professional life, as an English teacher. However, English was not my first language, having arrived in the UK from Italy at the tender age of three. At that time I spoke no English whatsoever, and my first memories are of my little village school in Scotland where I grew up, and where I learnt to read and write, chalk in hand! Very old fashioned, but what a wonderful way to learn. Since then, I have never stopped talking! - well I am Italian and as I'm sure you know, Italians ALWAYS have an opinion on EVERYTHING!! Languages must be in my blood, as I also studied French and Spanish. I've now transferred the 'teaching gene' into written form through the power of Amazon. I hope, that whether you are a trader, investor or a speculator, you will find one, or perhaps more, of my books useful in your own approach to the markets. Kind regards Anna --This text refers to the paperback edition.
The upside on a long put is almost as good as on a long call, because the option premium can increase many times in value. However, a stock can never go below zero, capping the upside, whereas the long call has theoretically unlimited upside. Long puts are another simple and popular way to wager on the decline of a stock, and they can be safer than shorting a stock.
From the option holder’s perspective, if the stock price is below the strike price, then the option is known to be “in the money.” In this case, the option holder can profit by buying the stock at the market value, but then selling it for a higher price at the strike value to the option writer (the option writer is obligated to buy the stock if the holder chooses to exercise his right and sell the stock within the expiration date; remember, options are contracts).
Investing with options— an advanced trader will tell you— is all about customization. Rewards can be high — but so can the risk— and your choices are plenty. But getting started isn’t easy, and there is potential for costly mistakes. Here’s a brief overview of option trading that cuts through the jargon and gets right to the core of this versatile way to invest.
A few more things need to be said regarding bid and ask price. The most basic way to describe ask and bid is that it is a two-way price quotation, the bid price being the maximum price a buyer is willing to pay and ask price being the minimum price seller is willing to take. As for Forex, profit is made when your broker asks for a price that is higher than he would be willing to bid, if, for example, you were the seller. Now that we know this, it is also important to know that that, let’s call it “area” between the bid price and ask price is known as the spread.

High Risk Warning: Forex Trading has the potential for very large rewards, but equally large potential risks. The high degree of leverage in Forex Trading and investing can work against you just as it works with you. To begin trading and investing in these markets, you should be aware of the risks and willing to accept them as Forex trading involves substantial risks, making not a suitable fit for all investors. Any of the content provided on Elite Forex Trading is given to you purely on a general advice basis and for educational purposes. We do not accept the liability for ANY loss or damage because of the information provided within our site, whether they have arisen directly or indirectly from using or relying on our website’s content. Please remember that past success and past loss is not indicative or future results.
Risk warning: Trading Forex (foreign exchange) or CFDs (contracts for difference) on margin carries a high level of risk and may not be suitable for all investors. There is a possibility that you may sustain a loss equal to or greater than your entire investment. Therefore, you should not invest or risk money that you cannot afford to lose. Before using Admiral Markets UK Ltd, Admiral Markets AS or Admiral Markets Cyprus Ltd services, please acknowledge all of the risks associated with trading.
Forex is a good place to earn money as it is a type of investment, and people all around the world are trading currencies daily. How much you can earn depends mostly on how much you invest, basically, like any type of investment. Profits can range from a couple of dollars to thousands and more every month. That is the obvious reason why some people are only trading on FOREX for a living. Where there is money there are always some risks and it is not uncommon for people to lose almost all of their money invested, but you have to have strong foundations to make it. You can’t build Empire State building on a shallow concrete slab. That is why you have to read a lot and inform yourself about Forex. You will probably learn about various trading strategies you can use which can minimize risk and maximize your profit.
About the author: Steven Hatzakis Steven Hatzakis is the Global Director of Research for ForexBrokers.com. Steven previously served as an Editor for Finance Magnates, where he authored over 1,000 published articles about the online finance industry. Steven is an active fintech and crypto industry researcher and advises blockchain companies at the board level. Over the past 20 years, Steven has held numerous positions within the international forex markets, from writing to consulting to serving as a registered commodity futures representative.
In the futures market, futures contracts are bought and sold based upon a standard size and settlement date on public commodities markets, such as the Chicago Mercantile Exchange. In the U.S., the National Futures Association regulates the futures market. Futures contracts have specific details, including the number of units being traded, delivery and settlement dates, and minimum price increments that cannot be customized. The exchange acts as a counterpart to the trader, providing clearance and settlement.
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