The rate of unemployment in the US currently stands at 4.5%, and in the UK it’s at 4.7%. With competitive job markets, a lot of people have to think outside the box to generate income for their livelihoods.

Fortunately, trading and investment opportunities are available for everyone in an array of different forms, including Forex trading. A currency pair consists of a base currency and a quote currency. In the GBP/USD pair for example, the British Pound is the base currency while the US Dollar is the quote currency. When you are trading Forex online, the units of quote currency listed is in relation to the base currency. For eg, When it says that the GBP/USD pair traded at 1.2496. This indicates that £1 is equivalent to US$1.2496 at that point of time.

So, Is Forex trading popular?

Forex trading is considered to be the world’s most widely traded market. It is much bigger compared to the trading activity on the Dow Jones, the NASDAQ, the CAC, the DAX, the FTSE 100 and all others combined. The daily trading volume in FOREX is in the range of $5 trillion per day. There is so much money to be made or lost in currency trading, and that’s especially why, a lot of people are interested in entering FOREX to find alternative sources of income. It is to be seen as a viable investment opportunity as geopolitical factors can be considered to hold currencies till they appreciate, or depreciate, relative to other currencies.

Currency trading is subject to some volatility, and it is because of the volatility that profitability is a possibility in this trade. If a currency pair is largely stable and moves only marginally from one day to the next, a trader will have to take use a larger capital to generate relevant amounts of profitability. Whereas, in a highly volatile trade moving sharply in one direction, it’s easier to make larger profits in relatively short term.

With the help of Forex trading platforms such as ETX Capital, you will be able to trade in a range of major pairs, minor pairs and exotic currency pairs.

So, How does Forex trading works?

Regulated Forex trading brokerages help you to trade currency pairs easily by providing you with a wide set of trading tools. These include various charts, analysis, and a wide swathe of information regarding the market conditions, so you can take informed decisions. Most currencies of the world tend to fluctuate by less than 1% a day. In order to generate solid profits while trading on currencies, it is required to take out much larger positions than you could afford, this is done with leverage.

Let’s see what leverage is about. Currencies can be traded with a leverage of 200:1, which means, a deposit of £500 would open up a position that is worth £100,000. This is same as other types of spread betting or CFD trading activity, and you should be cautious enough to remember that the trade can either result in a profit or a loss. It is possible to lose more than what you have invested in the first place.

Can Forex Trading Fit Your Needs?

You shouldn’t jump into forex trading right away, if you are starting out. Take your time to understand how Forex trading works. It will be an intriguing and curious ride. It is difficult to become a master investor using Forex in a few days. It is an acquired skill, and you should start and play around with a demo trading account before you begin depositing and trading using real money. You will see a lot of traders who have made and lost a good sum of money along their travel, but only those who have a legitimate understanding of the basics can prosper in the long-term.

I hope this article was useful for you to learn more about Forex trading and how it can help you improve your sources of income. If you have any doubts with regards to this, let us know through the comments and we will be glad to help you out. If you have any suggestions regarding how we can improve the article, let us know them through the comments as well for us to improve.

Do you have any other reservations against Forex trading? What are the tools and strategies that you use to maximize your investments in Forex? Let us know through the comments.