You just heard about forex. What is forex? Forex is foreign exchange market on which you can trade currencies. Volume of trading is so large that we can say it is largest market on world. Why FOREX is made. Forex is created to be easier to exchange currencies which are necessary for international trade. Why is necessary to change currencies?
Because we all live in global world, and all we have at least one product from China, Germany, UK, Indonesia, Japan etc… To be able to pay those products our trading companies need foreign currencies.
The need for foreign currencies created other market participants (Speculators). If you are not international company ho has need for foreign currencies, than you are speculator.
Speculators are not bad person with criminal activity. They are regular traders, who have different interest then regular traders. They have interest to earn money on currency fluctuations.
Currencies are traded against one another, and they have narrow choice and it revolves around eight currencies.
Since forex has daily volume of trading around 4 billion and it is most liquid market so you can buy or sell any listed currency at any moment.
Since Market is so big no one can control market, even banks don’t have enough pull to control the market.
Before you start trading you should know that key of success on forex is simplicity. Most of successful traders base their strategies on simple methods. Complicated methods and lot of information can only prevent you from acting.
To be successful trader you must arm yourself with:
- Basic knowledge of market (market terms)
- Basic knowledge of technical analyzes
- Experience (start trading with small amount of money which can be speed)
Basic market terms are:
- Pip is minimum price change. The most common Pip is 0,00001
- Bid is price at which you can sell currency
- Ask is price at which you can buy currency
- Spread is difference between sell and buy currency
- Currency rate is rate one currency against other
- Leverage (margin) means that you are required small percentage of the full value of your position to trade. And your risk is at level of your deposit. That brings risk to lose it all very quickly but also to earn lot.
- Pricing, Forex is quoted in terms of one currency versus another. Each pair of currency has a ‘base’ currency and a ‘counter’ currency. The base currency is the currency on the left of the currency pair and the counter currency is on the right.
Technical analyzes is study of price movement trough time and forecasting of price direction based on past market data. Video about technical analyzes…
Experience can be acquired on two ways. First is practice on demo account, and second trading on real money account. First try our partner demo software. When you are ready to start trading on real money account then invest only small amount which you can spend.