How to Make Money Online with Forex Trading
For many people, earning money online is just a daydream because earning money has always been offline in the real world. The Internet has played a great role in regards to online earning. We all know that the Internet is one of the biggest creations and it contains an endless information and knowledge that allows users to learn and earn. While there are multiple ways of earning money online, however, some of them could end up being scams, that is why is it important to remain proactive. Let’s talk about the most important ways to earn online
ONLINE FOREX TRADING:
Let’s first understand the meaning of Forex. Forex refers to the foreign exchange market, also known as FX. Forex is the largest financial market in the world. with a daily turnover of around $5.09 trillion in a single day! This is what makes it one of the most exciting markets for, especially retail investors. The major participants in the Forex market consist of large institutional investors and Banks, but the good thing is that the FX market is now available for retail investors.
Let’s discuss how it works and how to make online money out of it. Let’s say you would like to go abroad and you go to an exchange and use $1000 to buy British Pound. After few days, you come back (without spending a single British Pound) and exchange your British Pound back to dollars – but you receive $1020 because, during the week, the exchange rate changed. This is a profit of 20 dollars, which you made by trading currencies. Try to recall all those banners like ‘Exchange here’/ ‘Foreign Currency Sold; well, that is where you give the Malaysian ringgit and get US dollars in exchange. These brokers who offer currency exchange service buy the same – this is done in the foreign exchange market. Money changers earn their profit from the spread, that is the variance between the prices they quote at which they will buy a currency from you and sell it back to you.
Nowadays there is no need to go out of home to invest in currencies, moreover, there is also no need to actually buy the hard currency for trading. Thanks to Metatrader 4 and online brokers anybody can buy and sell soft currency online from home – or even from their smartphone.
ADVANTAGES OF ONLINE FOREX MARKET:
1- Unlike the share market, the Foreign exchange market opens 24 hours a day and 5 days a week. This means that traders can trade Financial instruments 24 hours a day, without a break. The Forex exchange market opens at 10 pm GMT on Sunday night and then closes at 10 pm GMT on Friday night.
2- There’s High Liquidity- In simple words, Liquidity means how active a market is. The main reason behind liquidity is because the Foreign exchange market works 24 hours a day. It is also a very deep market, with nearly $5.09 trillion turnovers each day. In the financial markets, when we talk about the liquidity, we mean how fast or easily a financial instrument can be converted into cash, either in a physical form or electronic form. Some financial instruments are highly liquid, like short-term US bonds or gold, both can sell quickly anywhere in the world, provided that, you are willing to sell them for a reasonable price.
3- High leverage- Leverage is the power to control something big from something small. With regards to Forex trading, it means you can trade using a small amount of deposit in your account to trade large volume. For example, if you have $500 in your account, and you open a $5,000 position (which is equivalent to one standard lot), you will be trading with 10 times leverage on your account (5,000/500). If you trade three standard lots, which is around $15,000 in face value with $500 in your account, then your leverage on the account is 30 times (15,000/500).
If you are familiar with e-commerce, you must have heard about “affiliate marketing.” The word Introducing broker is just similar to affiliate marketing. But the thing is that most of us are not well versed with it. Let’s first understand the meaning of Introducing Broker. An Introducing Broker (IB) works for a broker and his task is to bring new customers to a broker firm. The moment a customer deposits and starts trading, the Introduce broker starts earning commission per transaction. The commission is thus credited to the affiliate’s account/ IB account immediately. In order to bring new clients, you need to promote other people’s products or services through banners, recommendations, links or any other type of marketing collateral.
How to Get Started As an Introducing Broker:
1- Choose the reputed Forex broker which is offering a good commission to IBs.
2- Fill out a registration form in order to apply for the IB programme.
3- Read terms and conditions carefully before accepting.
4- As soon as you complete registration, your broker will send you a web link for your clients to open accounts electronically. It is important that your clients use the given link and not the normal website IB registration system.
5- Your will be given secure cabinet area on the broker’s site where you will be able to check the trading activity of your referred clients.
The advantage of Introducing broker:
1- Some broker offers up to $10 Per Lot on Your Referred Clients.
2- Earn commission of 10% on Your Sub-Partners. Suppose you are working as an IB and you introduce another person as an IB, the new person who becomes partner automatically gets eligible to become a sub-partner of yours. The good thing is that you earn 10% commission on all the earnings generated by that sub-partner.
3- No need to invest your own capital.
4- You can withdrawal of commission at any time.
How much does an Introducing Broker earn?
Let’s suppose that your broker offers 4$ commission per lot for each trade of your referred customer (s). You have attracted a minimum of 6 customers who deposited funds in Standard trading accounts and made the following transactions for one month.
|Referred clients||Trading lot per week||Deposits|
Let’s calculate the weekly commission:
Number of lots (10 + 15 + 25 + 15+ 20+ 40) * commission per lot 10 USD = 305$
Let’s suppose, the average trading volume of each six clients is 3 lots per day: 23 (Market opening days in a month) * 18 (6 clients * 3 lots per day) * commission per lot 4 USD = 1656$ per month
Let’s now take another scenario
|Number of clients||Average trading lots per day||IB Commission per month|
Here you can judge how profitable it is.
HOW TO DEPOSIT AND WITHDRAW PROFITS?
Most of the online payment is executed via Debit/Credit card, Skrill, PayPal, Neteller, etc. which is the easiest and safest to use online transaction system.