What is Forex trading?
What is Forex trading?
Forex trading is activities carried out for good earnings. Participants of Forex trading are called traders. In most cases, people who have money to invest are working on these exchanges.
For example, a person has a good job or a successful business. He provides his family in sufficient volume, while he has savings or available funds that can be invested in some profitable business. Open the bank account, but now it’s such a time that any bank can suddenly go bankrupt. The inflation can eat a small interest, which does not stimulate trust of such financial organizations in the crisis time. Keep houses in a safe? Start doing your startup? Invest in real estate? This is often a dead-end branch with shortcomings – it takes a lot of money (buying real estate). And probably, a lot of your time for this kind of business … And serious risks.
Different ways of accessing Forex trading
There are two options – to trade on their own or give money to management. Money management – in fact, the same risks, it is hugely counting on which specialist you will trust.
After all, a trader, in essence, is an ordinary salesman. The one that buys the cheapest and sells more expensively. But since trading is trading on the stock exchange, without the direct agreement with the client, the task is seriously complicated. The trader conducts a constant analysis of the cost of the goods, which today is predicted to sell well, find a way to invest in this product as little as possible money and by the end of the set time to get the maximum amount of profit after the sale.
However, it is no longer a secret that trading is a work that penetrates the network more and, like a computer, will soon be in every house.
Finally, through the Internet, access to the exchange is made, which allows you to try yourself in this area to any experienced internet user.
Not so long time ago, access to a closed trading network was able through brokers, only. That meant, financial trading for ordinary people was something unattainable. Brokers played mostly large-scale or were useless. So there was a need for traders. They invest their savings in the goods that they deem fit. The trader himself determines the time period in which he will trade, and he will take his profit. No mediation, except for the exchange itself.
Knowledge are required!
In the previous article, you will find that knowledge and experience are critical.
So, what is important? Wide theoretically base. Precise knowing of trading rules. The personal trading system (algorithm). Understanding hour stock/market is working. Time management. Deposit (which will allow you to gain valuable profit). Analysis of made orders. Essential to collect made orders data, follow mistakes. Develop new strategies. Make conclusions.
There are several of its. First -financial trading. Trading on the exchange (at Forex brokers), where they work exclusively with securities or shares. Since demand regulates the price, a competent trader will be able to determine what is better to buy or sell at the moment. For example, if the demand for shares of one firm increases, it is clear that soon the price of them will rise, the main thing is to catch this connection. The trader takes everything in his hands and buys as much as he can on credit at the current, not yet raised the price. And it turns out that in his hands will be net profit – the difference between tomorrow and today’s price. So, he sold the shares, in fact, not having them. He simply staked on his analysis. I could lose and stay in debt. It is financial trading.
Second – frequency (algorithmic) trading
Carried out by computers that spend millions of computing operations per second and, by these processes, independently execute all securities purchase and sale transactions. Analysts say that this type of trading stabilizes the use of markets and reduces the cost of turnover. But this method has many disadvantages. High-frequency trading focus on short-term, even second-time operations, bringing in profit so insignificant and working on small commodity turnover that this more than once led to a collapse of markets.
The third type – Forex trading or playing in the foreign exchange market
Forex trading lets earn good money on because its value can “float” in the range of four percent during the day. Then the world community under the general noise and created an international monetary system, with the help of which it became possible to earn money. Nothing complicated. You know that if you had a bunch of dollars a year ago, you would surely have sold them now when they cost twice as much. Traders also know this. Moreover, they can earn on it within a few seconds, making bets on a certain currency, based on their assumptions that the demand for this currency is about to rise, and it will rise in price, after which it can be profitable to sell. Therefore today, “Forex” -training is a powerful system for earning many Internet users and people who trust them to manage their money for profit.
There are some nuances. First, levels on Forex can float for a couple of cents because of a large number of applications and different brokers. Therefore, Forex trading is more complicated than in a more peaceful European market. Secondly, large movements in currency pairs are less frequent than, for example, on the shares of the American market. Third nuance – thanks to the developed system of shoulders (leverage) on Forex, you can come with a minimum deposit, and trade, literally starting with $ 100.