How financial trading actually works

When it comes to financial trading, I remember the first time i heard the term. I immediately associated it to something that I simply wouldn’t be able to understand. I thought of all these numbers and graphs, and I almost lost interest straight away. But a good friend of mine kept going on about it, and eventually I gave in and decided to give it a go. Fast forward a few years, and I’m now cashing in a nice addition to my salary every month from trading online, and in this post i want to explain to you how financial trading online actually works, in order to prove that this isn’t rocket science at all.

So to start off, i want to point out that there are two major forms of trading online which private people usually trade on, and these two are the ones I’m going to focus on today: Forex Trading and Binary Options. Both of these are very easy to understand, and if you are starting out, both of these would suit you pretty well.

Forex Trading

Forex trading started to become popular about a decade ago, and today it’s the most common form of trading, and the foreign exchange market is actualy the largest market in the world. Let me explain how it works, as it’s really simple. Forex trading is simply just buying and selling currencies on the forex market. The idea behind it is that you buy a certain currency at a low price, wait for the price to get higher, and then sell it again at a profit. This is how you make money off it. When you think of it, it’s just like any form of business really. The trick to forex trading is to learn enough about the market to be able to predict the future projection of a certain currency. This you can do by reading financial magazines, keeping updated on what’s going on in the world. A great site to look for information in my opinion, is a forex portal called They have pretty mch all the useful information that a beginner might need, along with some really good starting offers at various popular forex brokers.

Binary Options

Binary options is newer on the scene than Forex, but it has quickly become equally popular. The main principle here is similar to Fprex trading: It’s all about being able to predict whether a certain asset’s price is going up or down. However, the execution is different. When trading with binary options, you are basically placing a bet on a certain asset, such as a stock, currency, commodity or indices. You are not buying the asset, in other words. You decide whether you think the price will go up or down within a specified time frame, and you invest money based on that prediction. If you are right, you will get you initial investment back, along with a really high additional payout, usually around 80%. However, if you are wrong you will loose your full investment. Thus it’s a more risky type of trading than Forex trading, but that also means that you have a chance of making really quick profits off it. Similar to the site mentioned above, there’s a website called which contains a great deal of information regarding binary trading, and it’s an excellent place for a beginner to start out from.