What is Forex?
Foreign exchange market (Forex) is a nonstop cash market, are traded currencies of countries which, through intermediaries, of course. Buying and selling foreign currencies on an ongoing basis and at the same time through the local and global markets and increase investment dealers or decrease in value based on currency movements. Can foreign exchange market conditions can change at any time in response to events in real time.
The main catalyst for trading currencies for private investors and gravity about trading in foreign currency in the short term are: trading 24 hours a day, five days a week, with the entrance does not stop for traders in foreign currencies in the world.
Additional incentives for trading in foreign currencies:
Huge liquidity of the market makes it easy to trade most currencies
Volatile markets provide opportunities for profit
Foreign currency standard tools to control the level of risk exposure
Profit potential in the market high or low
Leverage trading strongly with low margin requirements.
Many options for zero commission trading
Trading in foreign currencies:
The investor's goal of trading in foreign currencies and profit from foreign currency movements. Are traded in foreign currencies always in pairs. For example, the exchange rate of EUR / USD on August 26, 2003 was 1.0857. And referred to this number is also "the price of foreign currency" or "price" just for short. If the investor had bought 1000 euros on that date, he would have paid 1085.70 U.S. dollars. And a year later, the price was 1.2083, which means that the value of the euro (the numerator of the rate of EUR / USD) has increased its relationship with the U.S. dollar. The investor can now sell the 1000 euros to receive instead of U.S. $ 1208.30. Thus, the investor would have USD 122.60 more than they started it since years ago. But, to see whether the investor has invested well, one must compare this with the investment option to alternative investments. At least, you should compare the investment returns on the investment returns "risk-free." Example of the investment is risk-free U.S. government bonds for the long term because there is almost no possibility of failure to pay, if the U.S. government go bankrupt or be unable or unwilling to fulfill an obligation of religion. (Please note that past performance is not indicative of future performance).
When trading foreign currencies, trade only when it expects to increase the value of the currency in which you want to buy them, compared with the currency in which it sells in return. If the value of the currency that you bought, you must re-sell the other currency in order to lock the profit. Open trading process (also called open position) is the process of trading where the shops to buy or sell a particular currency pair and has not yet re-sale or buy the equivalent amount to close the center.
However, it is estimated that between 70% to 90% of the foreign exchange market is speculation. In other words, the person or company that bought or sold the currency has no plan right in the receipt of the currency in the end, but the conflict only on the movement of that particular currency.
Exchange rate:
Because currencies are traded in pairs and are trading with each other when traded, called the price is traded at the exchange rate. Most currencies are traded against the U.S. dollar (USD). And the four most heavily traded currency is the euro so (EUR), Japanese Yen (JPY), Pound Sterling (GBP) and Swiss franc (CHF). Constitute the majority of the five currencies market, and is called the major currencies or "Home." Intervention to some sources, the Australian dollar (AUD) also to the group of major currencies.
Referred to the first currency in the currency pair the base currency and second currency for the currency counter or quote currency or counter currency. Currency counter or quote currency is thus the numerator in this ratio, and the base currency is the denominator. The value of the base currency (denominator) is always 1. For this, the exchange rate tells the buyer how much the currency needs of anti (opposite) or quote currency to obtain one unit of base currency. And the exchange rate tells how much the seller will also be the currency of the anti (opposite) or quote currency when selling one unit of base currency. For example, the exchange rate of EUR / USD 1.2083 specifies to the buyer of euros that must be paid U.S. $ 1.2083 for 1 euro.
At any point, at the time and place, if an investor buys any currency and immediately sells it - and did not get a move in the exchange rate - the investor will lose money. This is because the offer price, which represents how many will receive from the currency counter (interview) when selling one unit of base currency, is always less than the asking price, which represents how much to pay currency counter (the interview) or quote currency when buying one unit of the base currency. For example, the prices bid / ask the EUR / USD to your bank may be 1.2015/1.3015, representing a difference and is worth 1000 points (one point = 0.0001), and is very high compared to the price bid / ask currency deals by the investors in foreign currency on the Internet generally, such as 1.2015/1.2020, a difference of 5 points. Overall difference better at least for investors in foreign currencies as it requires an even smaller movements in the exchange rate in order to win from the process of trading.
Most traders are compensated in foreign currencies, including (Easy Forex), the differences are included in the prices of currencies.
Margin - The amount of risk by:
Require banks and / or providers of trading services via the Internet to ensure to ensure that the investor can pay in the event of loss. The guarantee is called margin and is also known as minimum security in foreign exchange markets. In practice, the margin is a deposit in a merchant account is intended to cover any losses in trading currencies in the future.
Margin investors can trade in markets where high minimum units of trading by allowing them to retain more of the value of the status of their account. Margin trading increases the rate of profit, but it tends to inflate rates of loss, in addition to the overall risk.
Strongly leverage funding:
Altamoabakoh crane, any use of credit, such as the purchase is a transaction margin, and is very common in foreign currency. Loan is secured in the margin trading account through the initial deposit. Can result in the possibility of trading up to $ $ 100,000 for as little as U.S. $ 1000. Can a relatively small movement in the market that have a significant impact on the proportion of funds that you deposited or deposited. And this can work against you. Where they can incur a total loss of margin funds deposited and any additional funds deposited to keep Bmraczk in the market.
Five ways investors can trade in the foreign exchange directly or indirectly:
Direct market
Contracts and future-oriented
Options contracts
Contracts difference
Betting on the difference
The process of trading directly:
The process of online trading is the exchange of simple currency to another. Price is the direct current market price, also called the price of the standard. Do not require immediate settlement, online trading, or pay "immediately". The settlement date, or "value date" is the second business day after the "transaction date" (or "trade date") which were agreed upon process between the traffickers. Give a period of two days time to confirm the agreement and arrange the clearing and registration of debt and provide credit to bank accounts in various geographic locations.
Risk:
Forex risky. There are ways to reduce the risk of a selection is to stop the loss of the process. Read more about the risks associated with, and how to reduce exposure to risk.
Further reading:
