What is Forex / Why Forex?

What is  Forex?

Before we get into the ins and outs of forex, I just wanted to explain 1 thing. You don’t need to know anything about forex in order to copy our trades. As you can see by our third party verified past performance, we know what we’re doing, and you can copy our trades exactly without even knowing what forex is!

That being said, for that that would like to know more…

Forex is short for foreign exchange, and involves the buying and selling of different countries currencies. Think of it like share trading, though instead of buying and selling shares, you’re buying and selling foreign currencies. 

There are some differences between share trading and forex. For a start there are no dividends. But the biggest difference would have to be that there is a duality to forex, which makes it bi-directional. Let me explain…

Let’s say you buy the Great British Pound. What you are saying is that you think the Great British Pound will go up… but up against what? The Great British Pound could go up against the US dollar, while at the same time going down against the Australian dollar.

So in forex, we’re always trading pairs. So our position might be “I think the Great British Pound (GBP) will go up against the Australian Dollar (AUD). In this case we would be long the GBPAUD.

You can also “short” the GBPAUD just as easily, which is essentially saying that you think the Great British Pound will do DOWN against the Australian Dollar.

In both cases, you don’t need any Australian Dollars or Great British Pounds in your account in order to make the trade.

Why Trade Forex?

1) It's Recession Proof

This one is HUGE! Given that you profit when a currency goes up or down in value, there’s no correlation between the strength of the economy and your trading results.

2) It's a 24 Hour Market

The Forex market is worldwide so trading is continuous as long as there’s a market open somewhere in the world. Trading starts when the markets open in Australia Monday morning their time (Sunday evening for half the world) and ends after markets close in New York on Friday.

3) Super High Liquidity

At over $5 Trillion (with a “T”!) dollars traded DAILY, the forex market is by far and away the most liquid market in the world (it’s not even a close second). For the trader, this means plenty of profit opportunities, but also, unless you’re a massive hedge fund trading billions, it means you’ll never find yourself stuck in a position that you can’t offload.

4) Low Transaction Costs

The transaction costs in forex tend to be very low, leaving more money in your pocket

5) High Leverage on Offer

Some forex brokers will allow you to trade as high as 1000:1. This means that with just $100, you can take positions as high as $100,000. Of course we don’t recommend you go that high, but a bit of leverage is nice to be able to make a nice profit from a relatively small move. Always remember though, leverage is a double edged sword. If you copy our trades, this will all automatically be dealt with for you.

6) Profit From Raising and Falling Markets

One of the biggest advantages to the forex market is that it’s bidirectional. If you think the Aussie dollar will go up against the US dollar, you can profit from that. If you think the Aussie dollar will go down against the US dollar, you can profit from that also!