“Maconomics” is a weekly series on REVOLT TV, where Wall Street’s premier rapper Ro$$ Mac shares tips about making your money work for you for a change. Catch the insightful advice on it and start watching your pockets grow.
There was once You Should Be Here, then there was Wake Up Now, and lately, it seems Forex is the latest craze to take over Facebook and Instagram with promises of making large amounts of money.
On this episode of Maconomics, Ro$$ Mac dives into what Forex is and explains all of its complexities. As he details, Forex is a legit market where global currencies are exchanged. Though anyone sending messages to various people on social media about selling Forex trade secrets might be a little shady, making money off the Forex Exchange can happen, but takes a lot of skill.
Read what you should know about Forex below.
1. What is the Forex?
Just like the stock market, Forex is just another investment tool, only way more volatile.
“The concept of Forex is not a scam,” Mac explains. “Forex stands for Foreign Exchange, which is exchanging one countries currency for another countries currency. So, this is honestly the largest traded market on a daily basis.”
Trillions of dollars are traded daily on the market, which is more than what’s traded on the stock and bond markets.
2. How to make money on the Forex
Making money on the Forex takes time and practice. The exchange rate across countries changes by the second. Most people who jump into its trading don’t make much of anything.
“Over 90 percent of retail Foreign exchange traders — you know small traders going in? — are losing all their money,” Mac says. “It’s because they’re going up against true professionals, who actually understand what’s going to actually move the Foreign Exchange market.”
These forex trade professionals make it their full-time job to understand every country’s GDP, their geopolitical risk, current inflation, and interest rates, government debt, as well as supply and demand.
What many folks are encountering on Instagram are Forex traders or brokers who want to sell a “signal” service, which suggests trades at a specific price and time. This does not guarantee a profit.
3. What impacts the Forex market?
On a bigger scale, multinational companies receive sales in one currency and have to exchange it back into US dollars, such as Apple, Google, and McDonald’s. This is Forex at work in business.
The amount of money exchanged to USD by what’s been made at a McDonald’s in Japan is one of the things that affect the market. Politics is also something that affects the Forex such as President Donald Trump making a speech aimed at a specific country.
4. Who can be a Forex trader?
Anyone who wants to participate in the Forex market is free to do so. In fact, anyone who has ever traveled and exchanged their money for the local currency has participated in forex trading.
“The moment you hop off the plane and you see their exchange stand and you see different numbers up there, that right there is the foreign exchange rate,” Mac continues. “That number is going to be changing on a daily basis.”
Mac suggests being “weary” of someone hitting you in the DMs about Forex trading, but understand the Forex market is real.
5. The appeal of Forex trading
Since the market is extremely volatile, it poses the highest risk, but offers the quickest return in a matter of seconds. The market is also open five days a week from Sydney to New York, and is one of the reasons it’s easy to make quick money off of it.
As a brand new market, Forex is based on the supply and demand of a country’s currency, which then spills over into interest rates, tourism, and economic performance.
Investors usually profit from the interest rate differential between two currencies or if the exchange rate changes.