Suppose you travel from the US to Japan and trade some American dollars for Japanese Yens. You will notice there is an exchange rate, say 100 Yens for 1 US Dollar. You may also notice the exchange rate varies from day to day. Do you know why?
The Gold Standard
Before, all the currency was backed in gold. That means that the value of gold was fixed. In the 1930’s, 1 oz of gold was worth 35 US Dlls. After WW2 many countries based the value of their currencies on the US Dollar and since everyone knew how much a dollar was worth in gold they could easily base the value of their own currency against the dollar gold value. To make it simple, if an oz of gold in the UK was worth 2 Pounds that means 2 Pounds could buy 1 Dollar.
The Gold Standard is Replaced
After a while the US Dollar was affected by inflation. That means that one dollar could no longer buy the same amount of goods it did before. In 1971 the US government was forced to eliminate the gold standard. Now the value of the dollar is measured by comparing it to other currencies. It was worth what the world market said it was worth.
So how Simple is it to make money with Forex, really?
Besides just needing a computer with an Internet connection all you really need are the basics of Forex trading. You only need to understand terms like margins, spreads, leverage to quickly set up your money making opportunity and start to make money with Forex. Thanks to the internet, buying and selling anything is a breeze. Besides that, you can use automated programs that will make your trading decisions for you allowing you to make money with Forex very easily.
How do Automated Forex Traders work?
Because Forex trading is a trend business, an Automated Forex trader is an enormous help. What these Forex traders do is analyze a huge amount of historical data and actually make a decision for you. People are skittish about letting a machine do their thinking, specially their decisions but the majority of these softwares place very low risk trades based on a huge amount of data analysis insuring a small profit per trade. Let the program place several of these low risk trades a day and you’re looking at a very lucrative opportunity. This automatic traders do work and allow you to make money with Forex even while you sleep.
How often can I trade?
The currency exchange is open 24/7. Using automated programs to make money with Forex gives you the advantage of just letting the software do its part while you focus on other tasks. All you need is to make sure you have an active internet connection and a working computer so you can start to make money with Forex.