Make money by Forex trading is a little risky and you should learn Forex trading before using your real money to open currency trading account, In the Forex Trading, money can by buying and selling currencies but this is not the only way to earn money but there are some other ways also to earn money. These ways are Carry trade, Futures trading, Options trading and Commodities trading.
Make money by Forex trading and other ways
Carry trades are done to earn interest on the specific currency pairs. A fee occurs when two currencies are bought and sold. The reason behind this fee is the difference of interest rates existing between the currencies. This difference should be balanced in every Forex transaction. The traders and investors can earn credit if they buy a currency having higher interest rate. Let’s see how this interest is calculated. For example, if a trader is trading in USD/JPY currency pair. In this case, the interest rate in US is 5.5% while it is only 0.5% in Japan so on subtracting the interest rate of Japan from the interest rate of US, 5% is the amount left that must be credited to the trader who has gone long in the USD/JPY currency pair. This will be an extra earning for the trader.
Forex Trading is buying and selling of currencies and you can make money by Forex trading but when the word Futures is added to it, it adds little more to the original meaning of the Forex Trading. This extra addition is in the terms of a specified date. So the term Forex Futures Trading means to trade the currencies at some specified date. The reasons for Forex Futures trading could be different for the different traders and investors. Some traders may want to reserve the currency that they will exchange and some traders may only want to earn from Forex Futures trading. In US, CFTC regulates the Forex Futures trading. To trade Forex Futures, the traders and investors must have an idea of the entry and exit price points at a future date. Futures trading becomes easier with the help of Automated trading Software.
Not more than 1% of the traders and investors do the Options trading. The reason is because 90% of the traders do not have any idea about Options trading and those who know do not want to do Options trading because they find it too complicated. Forex Options are the Options that gives rights to the traders to purchase a CALL Option but no obligation to buy and the traders also have the rights to sell a PUT Option but no obligation to sell.
The CALL Options allow the rights to the buyers and the PUT Option allow the rights to the sellers. These transactions take place on a specified date. This specified date is termed as the Value Date. The two more dates are known in the Options trading and these are an Exercise Date and an Expiration Date. The Exercise Date is when the buyer or seller invokes the right to buy or sell an underlying asset and the Expiration Date is the day when the Option expires. The price of the asset traded is termed as the Strike price. The buyer has to pay an upfront or advance to the seller. Remember, Options trading allows the rights to the buyer and seller to buy and sell but no obligation is there for the sellers and buyers and this is the difference between the Options trading and Futures trading and don’t forget you also can make money by Forex trading .
This is a unique concept of the Forex Trading that may have higher levels of profit and less risk. The traders and investors doing Commodity trading do not need any middlemen to complete their transaction. Transaction is lower in the Commodity trading. Market is open every time so you will see more opportunities to earn profit. An Automated Forex Trading Software will make your work easier if you are doing the Forex Commodity trading. You will get buy and sell signals and the current exchange rate.
So there are other ways to make make money by Forex trading but use these ways only if you are proficient enough to complete a trade otherwise profit may turn to loss.