First Suggestion: Forex Trading

Sorry, that I have not posted here yesterday. I’ve been busy. I’m a bit busy today as well, so this will be a short intro post.

Ok. It’s time to deal with one of the concrete ways black folks can make money.

Foreign currency trading.

The Foreign Currency market (Forex for short) is the largest market in financial assets, period. Any other market: Oil, commodities, and, in particular stocks, pales before the Forex market.

The market is open on a 24 hour basis from Sunday afternoon to Friday afternoon New York time. What is traded are words: US Dollars against Euros against Yen etc. None of these different currencies are backed by anything or are physical things. Nonetheless, they are used to exercise power.

Getting into the Forex trade is easy, not that risky, and requires almost no capital these days. Moreover the leverage is astounding.

While in the stock market one may work with a margin of 50% (that is the broker loans you 50% of the purchase price of the shares you want to buy), in the Forex market you only have to put up 1% or 2% of the amount of the currency you are trading. That means that with $100.—one can control $10,000.--. Of course I would not recommend to anyone to use this kind of leverage.

The other thing that is of a great advantage is that there are no brokers or brokers fees involved. Market makers solely make their profit of the spread. That is the difference between the purchase price of a particular currency and its sale price. The spread is usually negligible.

Given the great amount of leverage involved, your capital can get lost as quickly as you can make it. This is why you should not begin with more than $100.—and at the most with $1,000.--. The most crucial thing here is money management. That is, finding the right leverage to work with. 20% should be ok for a beginner.

More later…