What is Forex Investing?
Forex investing is a topic that you hear a lot about on many financial websites these days. If you're visiting this site, you're going to hear a lot more about it (obviously). So what is this mythical Forex market that you've heard so much about? Should you get involved in it? Is it a scam? Why am I asking so many questions? Read on to find out.
What is Forex ?
According to the financial website Investopedia, Forex is "The market in which currencies are traded. The forex market is the largest, most liquid market in the world..."
In this market, you don't trade stocks, bonds, baseball cards or pins. You actually trade money. You trade one currency against another. For instance, you might think that the Euro is going to gain value in relation to the Dollar so you buy Euros.
In this market, you're hoping to make money off of the changes in the exchange rate between two currencies. Pretty simple, right?
Forex Investing vs. Forex Trading
If you have spent any amount time in the financial markets, you will learn that investing and trading are not necessarily the same thing. If you are interested in investing in the works market, you can do so by purchasing units of a currency and holding it for the long term. For instance, you might think that the dollar is going to increase in value relative to other currencies. Because of this, you get a bunch of Dollars and put them in a safe in your house or in the bank.
By comparison, Forex trading is a different game. To get involved in this, you will need to open an account with one of the many Forex brokers that is available in the market. Forex brokers allow you to open an account and get started trading Forex currency pairs. When you trade in this market, you always buy one currency and sell another. Currencies are paired together. For example, if you buy the EUR/CHF, you are buying the Euro and selling the Swiss Franc.
Forex investing is a relatively low risk endeavor because you're taking a very long-term approach to investing. If you get involved in trading, it can carry with it a large amount of risk. When you trade in the Forex market, you will have to do so with a large amount of leverage that is provided by the broker. This could cause you to lose more money than you anticipated.
If you're interested in finding out more about this Forex market, don't hesitate to stick around and have a look at some of the resources we have to offer. Click on "Start Here" on the left side of the page if you want to find out more. You can move on to learning more about the market, brokers, trading systems and software products. If you have any questions, visit the "Forex Questions" section and get them answered.
Return From Forex Investing to Definition of Foreign Exchange
Return From Forex Investing to Forex Trading