Forex trading is a financial instrument with the largest market in the world, beating stocks and other instruments. Chances are you are interested in or have received foreign exchange trading offers. Before jumping in, know in advance what is foreign exchange buying and selling? How to manage the risks that must be understood in this foreign currency investment?
Want to get rich quick? One of them is the most important buying and selling forex, investing in foreign currencies.
Can be handled with some steps and mitigation (read to the end!).
Learn What is Forex Trading (How to Play & Risk for Beginners)
There are two arguments for people to buy and sell foreign exchange, (1) international trade; (2) trading for profit printing.
What is quite surprising is that 80% of foreign exchange arises because of buying and selling, the second direction above, not because of the need to replace money.
So the element of trading, betting, is really thick in forex.
Therefore, before jumping into this instrument, you should learn what forex trading is and how to manage the risks. Understanding the Forex market Trading Forex Trading is
Since the advent of online trading, where everyone can invest, foreign exchange buying and selling has grown rapidly
the Forex market is short for ‘Foreign Exchange’, the buying and selling of foreign exchange.
If you want to travel abroad, for example to Singapore, I go to a cash changer to change my rupiah to Singapore Dollar so that when I arrive I can do business transactions with the current currency.
It’s the same thing when you change rupiah to euros to travel to Europe or US$ to go to the United States.
So I hold dollars or euros. There is physical money that I brought home after doing business transactions at the money changer.
You buy and sell foreign exchange trades to bribe profits from the movement of exchange rates for a pair or currency pairs.
No greenbacks or euros that you take home. All just notes on the computer monitor.
This is new forex trading. Advantages of the Forex market Market
The transaction value of the stock trading business on the NYSE, Nasdaq and Tokyo combined amounts to $300 billion per day. This has been an enormous amount.
However, the value of the currency in daily foreign exchange trading is US$ 6.6 Trillion, according to Bank International Settlements. Multiply above the stock.
Why foreign exchange has the largest business transaction value in the world?
There need to be something true approximately foreign exchange buying and selling !
The iPhone was designed in Cupertino California, Apple’s headquarters, but made in China.
It is globalization of trade for more cost effective production and higher income.
The rise in globalization of trade in recent decades has driven forex trading up.
Iphone workers in China want to be paid in Yuan not in US$, so Apple has to replace USD into Yuan to pay for production costs.
On the other hand, Chinese customers who buy iPhones have to change Yuan to USD to pay Apple in the USA. 2. Totally Liquid (High Volatility)
The large value of business transactions in the foreign exchange market makes the market completely liquid.
Because in the foreign exchange market there are many factions that participate in trading, namely:
Government. Requires foreign exchange for various purposes, including paying debts, receiving debts.
corporation. Export and Import by corporations are trading activities that are closely related to exchange for foreign exchange
Investors. Forex trading in a plan to seek profit from exchange rate movements.
A liquid market is really loved by investors for trading, because you can buy and sell currencies easily because there are always rivals. 3. Get Rich Quick Steps
When you buy shares, you come home with the shares, which in this case are placed in custody, and these shares represent ownership rights in the company . Then there are items you have.
Forex trading is different. You do not hold the goods, there is no currency transition, such as during a business transaction at a money changer.
When you do a closing status in forex, you only see a price difference, and pay (receive) the price difference, depending on the profit or loss of your status. c. Advantages of Forex Brokers
I explained initially that foreign exchange business transactions are Over the Counter – it occurs between two factions, you and the Broker. There is no central exchange authority in the middle, as in stocks, in forex buying and selling.
In its implementation, the role of brokering becomes very central in Forex business transactions.
You should pay close attention if the dealer you use has the most trusted licenses and regulations.
In general, forex dealer regulations are separated into:
Indonesian Local Forex Broker. Arranged by CoFTRA.
International Forex Broker. Organized by several countries, the most popular being FCA UK of the UK.
Make sure the broker you are using is subject to which rules. You can check with CoFTRA or FCA UK to confirm a dealer permit. Steps to Trade the Forex market
This step of buying and selling foreign currency is important to understand. The key to success.
The trading concept is the same, purchase low promote high and promote excessive purchase kow. Traders reap the benefits of the inequality of the buy and sell prices.
When you predict if the price will increase, then put a buy status, on the contrary, put a sell status when the price is predicted to decrease.
What price as a basis ?
In foreign exchange, the price that is the basis is the exchange rate of a currency pair. The term ‘pair’.
The exchange rates for currency pairs are different every time. Can be strong or decreasing.
