Every day when you go online, you hear more stories of how people are making their money work harder for them. Do you ever get the feeling that you’re missing out on a trick or two, staying out of debt and only managing to put a little by each month for your savings?
Of course, you’re not, and staying out of debt is the most important financial lesson to learn. But if you’re clear of debt and you’ve managed to amass some savings, you could try trading to see if you can make those savings generate a better return than you get on the typically low interest rates that are around for savings accounts at the moment.
Many people are wary of risking their hard-earned savings, and rightly so. However, it’s now possible with online trading providers such as Tradefair to do some virtual trading and see how you get on with it, before you introduce any real cash. This is ideal for someone who is new to the world of trading and wants to ‘dip their toe in the water’, so to speak.
There are many different markets you can trade in, but the world’s biggest trading market, and one of the most popular for beginner traders to cut their teeth on, is the foreign exchange market, also known as Forex. Last week, the foreign exchange market saw a seismic shift when the Swiss Central Bank removed the cap it had placed on the Swiss franc’s value against the euro. The cap had been in place since 2011, and when it was lifted, the value of the Swiss franc soared by 30%.
Changes in the values of foreign currencies against each other very rarely move as dramatically as they did following the removal of the Swiss cap on the euro. But when people trade in the foreign exchange market, they are really placing trades depending on what they think will happen to the margins between the values of different currencies set against each other. Currency rates are affected by all kinds of factors – political, economic, social and emotional – and no-one can truly know what is going to happen for sure. However, the more you study the shifts in currency values and the reasons behind them, the more you’ll get a feel for the kinds of foreign exchange market trades you should be placing.
If you decide to start trading in forex at Tradefair, it is definitely a good idea to make use of the simulation trading module while you learn the ropes. Then, when you feel confident that you know what you’re doing you can start to introduce real cash – starting with very small amounts. Take it slowly and steadily; don’t go into trading thinking that you’ll double your money in the first few months. Incremental progress is far better than sustaining a significant loss. Real life isn’t like those Wall Street films – it’s about getting your money to work harder for you, so that you make gradual progress overall. There’ll be times when your trading decisions prove to be the wrong ones, but the only way to see if you have the knack for trading is to actually have a try at it.
Of course, you may decide that you don’t enjoy trading on the foreign exchange market, in which case, you can always switch to something like commodities, where you can speculate on future prices of commodities such as gold, cocoa, sugar and coffee. Tradefair has over 3,000 markets that its traders can trade in, from one single account, so it really gives its users plenty of options.
Using a site like Tradefair, where you can use the simulation model at any time, allows you to try your hand at trading without taking a large financial risk.
Photo courtesy of: David Paul Ohmer
