Forex is short for “Foreign Exchange”, and is basically swapping over currency from one country for one from another – For instance swapping your British Pounds (GBP / £) for US Dollars (USD / £), like you may do when going on Holiday (Vacation), or in this instance for investing purposes.
For investing purposes, this is basically done by taking advantage of changes in value for the currency over the passage of time. Thanks to the same technology you’re using to read this article, you can keep tabs on it via the internet at a dedicated Foreign Exchange website.
In order to do it for the purposes of investing you will need the following:
- Knowledge of what you’re letting yourself in for. If you want to be successful at any kind of investing, you need to get your geek on, and do craploads of reading to learn how it works. If you jump into investing without knowing what you’re doing, you’re going to get your ass kicked (as the Americans say). For that, you may want to consider a couple of books such as Currency Trading for Dummies (among others)
- A customer account with an investing broker that allows you to do Forex Investing.
- Some money to invest….. most the brokers I’ve seen who allow you to do Forex require a minimum £200 – £300 for your first investment. If you can’t afford to lose it, you may want to consider a different sort of investment.
- Research of what’s happening in the market, such as the Currency Heatmaps at Digital Look (I always have trouble finding them again).
- Practice via an online fantasy investing game such as what was available at the now defunct Bullbearings (that’s the one I’d been using for at least 10years now) so you can get the hang of what you’re doing without pissing any real money up the wall by making rookie investing mistakes (and trust me, you WILL make mistakes).