In this era of harsh economic realities when jobs and business deals are hard to come by, many individuals are opening new vista of opportunities in a bid to make money and make ends meet. One of these new businesses that many are going into is forex trading. This is a business that involves trading in foreign currencies like the dollar, pound sterling, yen and so many others. It is something that is done on the internet using internet tool. The difference between this kind of business and the normal black market trading in foreign currencies is that in foreign trading there are brokers who are like bureau de change officially recognized by their various government and registered with the appropriate regulatory agencies that keep them in check to ensure that there no excesses. Based on that, one opens a normal account with them like one does with the banks or with stock brokers. One would deposit some money into one’s account and then using the computer and the internet, one could get the necessary soft wares like the Metal Four trading platform, which is one of the most widely used. One could log on to it and then place orders. One could walk into one’s bureau de change, find out what the a currency like the dollar is going for and then decide to trade on it another currency like the naira.
        Pastor Leo Ugochukwu is a forex trader, he explains how one could make money from Forex trading: "Normally, the prices of foreign currencies are not stable, one makes money from those little changes, that is, the fluctuations. So, you place your order based on your projections. For example, you project that maybe the dollar will fall, for that reason you are going to sell, normally the currencies are in pairs, the naira and the dollar. When you are buying the dollar, for example, you are selling the naira to buy the dollar. You sell N149, for example, you buy a dollar. So, if the dollar is going to rise, what do you do? If you project that the dollar is going to rise tomorrow, you can buy the dollar today by selling your naira, and exchanged it for the dollar, and by tomorrow the dollar goes up, what do you do? You sell back the dollar and buy the naira."
As if the trading does look more like local Baba Ijebu gambling, Pastor Ugochukwu said no, "In trading forex there are two ways of doing it, one, is the technical aspect of it. The second is the fundamental or news releases. The technical aspect requires you taking into consideration so many things like history…history is very important. You look at the currency pairs, for example maybe the pound and the dollar paired together over a period of five, six, 10 years. What happened? How did the currencies react over the years. By this time last year, what was the market position like. Normally, like we say, history repeats itself. So, when you look at it, you discover that a particular currency pair develops a kind of trend or pattern over a period of time. So, based on that you are able to make your analysis and project what the price is likely going to be. That is the technical aspect.
"Then the other aspect of it which is the fundamental, is where we talk about news release. There are what we call indices, financial or economic indices, like gross domestic product, unemployment rate, employment changes, so many of them. So, as these items or releases are being released by governments and other agencies, it affects the weight of a particular currency. So, when that happens, you can trade based on that. You can actually focus mainly on fundamentals. There are people who actually trade purely on fundamentals."
A very volatile trading business
     Ugochukwu also answers questions on what should inform the decision by an individual to use either the fundamentals or the technical: "Forex trading is a very volatile. You can lose your money just within seconds. So, a lot of people are into technical. But I will prefer the fundamentals. If you have the right software, the right tools, the fundamental is a little easier. You actually will make more money in a question of minutes, unlike technical trading where you have to wait and wait. Again too, depending also on your emotional stability, what you can take. A lot may not be able to take the pressure of seeing the market go and come down. There is a lot of pressure. Emotional stability can also affect the way you react to the market. So, these things all have a part to play-your discipline, your emotional stability all have a role to play if you are a technical trader.
"On the other hand, if you are a fundamental trader, once you have the right tools to trade with…in the fundamental, if there is no trade, there is no trade. So, you don’t lose, you don’t make money, if there is trade there is trade."
       Risks involved in Forex trading
      What type of forex trading one gets involved in, one thing that is ever present is the risk factor. A lot of risks are involved. In the technical aspect, sometimes you may have done your analysis and your analysis are quite alright based on history or other indices and calculations. Based on that, maybe, one decides to buy. An incident could happen in any aspect of the world and it will affect the market. So, if you are a technical trader, when that happens, you may lose or gain money.
On the other hand, one may be a technical trader and forget or take cognizance of certain fundamentals, it can ruin your account.