Because the gains aren’t as large, many people use leverage to increase their potential and risks. So eg. if you put $5,000 in, you can be given $100,000 worth of currency. If that currency goes up only 1% in value, you make a $1,000 profit. But if it goes down you’ll also loss $1,000.

My strategy in theory is to leverage $100,000 and sell on a 0.5% gain. That gives you $500. Currencies will fluctuate more than 0.5% within a day, so if you just choose at the time time and do this just 2 times a week, you’ll make $1,000 a week or $52,000 a year.

The problem is that if the currency falls in value you’re stuck. So sticking to a currency that’s already undervalued will give you less chance of it falling further. The AUD is very low in value at the moment so if you buy today at 0.640, you can expect it to reach 0.645 within a few hours of buying it, giving you $500. If the AUD still falls, you can expect it to recover to 0.640 because it’s already a very cheap price to buy it so it will reach that price again within a few days or weeks.

If you don’t use leverage, then you can’t lose any more than the money you’ve put in. But $5,000 selling at only a 0.5% gain gives you just $25 which isn’t very much.
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Cheers!
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You can make large sums of money trading currencies but not without risk. I would personally advise on never using more than 5-1 margin or 10-1 margin if you do decide to trade currency. A good site explaining all of this and forex opportunities is http://www.forexopportunity.net they offer free information on getting started with currency trading.
References :
http://www.forexopportunity.org
http://www.forexopportunity.net

forex is a zero sum game. there’s a great rule of thumb when dealing in the financial markets: if you don’t know who the fool is, then you’re the fool. investment banks pour billions and billions of dollars into these markets. who do you think the fool is: you or them?
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