What is the Forex?
Forex is currency market, often referred as the FX . It is the world currency market. It is daily turnover is more than $ 5.3 trillion. This market is based on the trading world currencies.
How does the Forex work?
Trading is done in pairs. There is always trading with currencies in pairs. Examples are such as EUR / USD / CHF, GDP, EUR / JPY etc. After opening trade on the market, one currency goes “long” and the second “short”. This market has no central location and because of it, it is a very flexible option of trading all over the world.
Fundamentals of Trading
The main point of the game in the Forex market is settling purchase and sale operations of foreign relations at the same time with the aim of striving to make a profit due to currency fluctuations over time. Foreign trade contacts in the Forex market is based on the turnover margin. Market Participant (the investor), lays its cash resources to a broker in escrow, which corresponds to the amount of that sum. The investor has the right to manage the financial leverage. If the investor selects the wrong order, which does not allow the continuation of the game (leverage), the broker is blocking the game further, that the investor did not suffer major losses.
During the trading margin, each operation has two phases: the purchase (sale) of foreign currency at one price and then sell (buy) at a different price (or the same price). The first action is called opening the position and the second closing position. During the opening position has no real contact with a foreign currency, a participant who opened position, is responsible for the possible loss of deposit guarantees. After closing the position of the security deposit is returned, and gains and losses are accounted for, which usually correspond to a maximum amount of security deposit. Margin is often a hundred times less than the sum which the player uses to commercial operation.
Getting Started in Forex
To trade on Forex you do not need a lot – in contrast to other financial markets. No license is required. At the beginning you can trade a very small initial capital. However, we do not recommend to start the game without prior preparation. This should include reading, studying, learning the ins and outs of the market and the choice of a reliable broker with whom you can trade
The Forex market is one of the most volatile markets in the world. It operates 24 hours, is never closed. Prices are based on a wide range of factors, both economic and political issues. Everything has an impact on the movement in the Forex market. However, the key drivers of currency are the interest rates, inflation and political stability. Governments often jump on the forex market to manipulate the prices of currencies. They do this by flooding the market with their currency in order to lower its prices, or buy large amounts of its currency in order to raise its prices. However, due to the enormous size of the Forex market, there is no single entity that she could have a serious impact on him.
Continuous opportunity for profit
The forex market is always a chance for profit – both in succession and growth rates.
Trading currency is uncertain
Currencies reflect the trends in the global economy. They are generally volatile and large movements occur each day. This enables traders to seek capital gains. Without hesitation is not possible to make large profits.
Forex has one big advantage – leverage. It allows you to trade more substantial resources than we have in your account. For example, if you have $ 100.000 on the account, the broker will allow you to use up to 200 times more. This increases your potential profit and loss. The key to success is to control potential risks all the time to get the odds in your favor and achieve big gains.