Investing in the British Pound May Just Be Stupid
At the time of publication, the British Pound (GBPUSD) CURRENCY:GBP is trading up 114 pips at 1.2671 against the US Dollar. It is making headline the surge because Prime Minister Theresa May has called for elections on June 8th.
We don’t really care about Brexit, nor do we care about the results of the elections, what matters to an investor is where can we profit and make money from the moves.
Stop Investing and Start Trading!
There is no need to kick yourself over the profits you missed out on. You are probably thinking that just the other day you told your friend over burgers and chips that you know early elections will be called and the pound will shoot higher.
Looking at the chart of CURRENCY:GBP (GBPUSD) for the last six months show that it is in a vary boring, go nowhere trading range. So the net results of an investment in a Forex ETF would have produced zero gains.
Meanwhile, if you look at the daily movements, gyrating up and down, there have been plenty of opportunities for high speed traders and scalpers to extract profits from the market.
How To Make Money Trading The British Pound
Anyone who tells you that it is easy to make money as a currency trader is lying to you.
It takes many hours of studying the global markets, and learning a few basic strategies for trading Forex. Many of the large and established brokerage firms offer, either one on one training or online webinars like iTrader.com or Markets.com.
Start by learning about the psychology of being a proper investor, where it is not about emotions or political opinions, but about simply reading the chart, and interpreting the price action.
Playing For The Big Prize
Another way to speculate in the currency market is via a product called Binary Options.
When trading a binary option, you simply predict if the British Pound is going to move higher or lower, and you profit up to 100%. The established London based broker ETX Capital offers trading in binary options in addition to their traditional forex trading account.
The risk in trading options is that they are an all or nothing bet. The way to manage risk is much different, and when trading an account that has a balance of one thousand pounds, you would not risk more than £25 on each trade.