It's time for lesson 3 my dear Friends. Listen to this:

"Leverage" ist the FOREX advantage

The ratio of investment to actual value is called "leverage". Using a USD 1'000 to buy a FOREX dontract with a USD 100'000 value is "leveraging" at a 1:100 ratio. The USD 1'000 is all you invest and all you risk,  but the gains you can make may be many times greater.

How does one profit in the FOREX market?

Obviously, buy low and sell high! The profit potential comes from the fluctuations (changes) in the currency exchange market. Unlike the stock market, where share are purchased, FOREX trading does not require physical purchase of the currencies, but rather involves contracts for amount and exchange rate of currency pairs. The advantageous thing about the FOREX market is that regular daily fluctuations - in the regular currenc exchange markets, often arount 1% - are multiplied by 100! (Easy-Forex® generally offers trading ratios from 1:50 to 1:200).

That's it for today. Join us tomorrow for information about how risky is FOREX trading and how to start trading on FOREX.

Cheers

Francesco