Trading in Forex

Trading in Forex

Trading in Forex

Trading in Forex, trading in forex online, trading in forex for beginners

The basic concept of  Trading in Forex

Forex market represents foreign exchange/foreign. The word FOREX is a currency of two English words and foreign exchange and indicates the buying and selling of currencies of different countries.

Unlike other stock exchanges, Forex has no physical seats in a city. There is an electronic network consisting of major financial institutions.

Today, Forex is the largest financial market, which has a daily turnover of around 5.5 billion dollars a day.

This entire process can be performed through the Internet.

The term currency market means selling one currency and buying another simultaneously. Since traded currency pairs which benefited from the advance, of course, have to buy the currency that you believe will strengthen and sell the other.

For example, if you believe the euro (EUR) to strengthen against the dollar (USD), will buy EUR / USD; or in other words buy euros and sell dollars. If you believe the euro will depreciate against the dollar, then it will sell the EUR / USD; or sell the euro and buy dollars.

No need to wait for a growing market that has benefited. At any given time, a coin strengthens against the other. Forex market is constantly creating investment opportunities.

Since nothing concrete and tangible bought and sold, this trade can be a bit confusing. And to think that some kupujueš the value of a country. If you say that you buy Japanese yen, buying of the Japanese economy, which is in direct correlation with what the market thinks the state of the current and future health of the Japanese economy. Overall, the course set two currencies is the relationship that reflects the state of the economy relative to other economies (countries, currencies).

In the currency can be traded 24 hours a day, except weekends, so the Sunday trading begins on Sunday from 21:15 CET and will run until Friday at 23:00 CET. During the day there are various time intervals that match the hours, the largest stock exchange in the world. For example, the London Stock Exchange started working at 9: 00h, New York at 14: 00h, Sydney at 23: 00h, while Tokyo opens at 1:00 at night, our time. Currency trading, the liveliest during childbirth London and New York and it was then that case, major changes in currency values.

When it is trading in the forex market?

Trading in Forex, trading in forex online, trading in forex for beginners

forex traders can be classified into two groups, the insurer, and speculators.

Hedger: Governments, companies (exporters and importers) and some investors who are exposed to changes in exchange rates. The progress of the national currency against foreign currency companies doing business with (to exchange goods and services) or in which to invest, affect their profitability. This is the core of all foreign exchange trading; However, it accounts for approximately 5% of the real market.

Speculators: This group, which includes banks, funds, corporations, and individuals creates artificial pressure on the exchange rate in order to profit from price changes, or moving.

currency pairs

Currencies are traded in pairs and both are shown. the three-letter code for currency, bar, and other codes of three-letter currency is always displayed. The first currency displayed refers to "core", "leading" or "primary currency" (base currency), the other currency refers to the (secondary currency) (currency trading).

The most famous couple is definitely the EUR / USD (Euro-US dollar).

Each currency is recognized by the three-letter code. For example, the euro, the euro and refers to the European currency, the USD is the US dollar. major world currencies (often referred to as the Commander) are USD, JPY (Japanese Yen), GBP (Pound or Sterling), CHF (Swiss franc), AUD (Australian dollar) and CAD (Canadian dollars).

For example, when you see EUR / USD, then leading the currency of EUR and the USD is the secondary currency. "Currency pair" is followed by a 5-digit number after the decimal point of the first digit, for example, 1.2660. The number represents the ratio of one currency in terms of another, and can be read as "the sum of the second currency (secondary currency needed to drive major currencies." In the example we have given, EUR / USD 1.2660, 1 euro will need $ 1 and 06.26 cents.

Although there are a large number of coins that can be traded, usually traded with 8 currencies: the US dollar (USD) the euro Europe (EUR), the Japanese currency known as YEN (JPY), Lb sterling (GBP) , Swiss currency (Swiss franc) (CHF), Australian dollar (AUD), Canadian dollar (CAD) and the Hong Kong dollar (HKD). These coins are called major currencies

Calculating your profit / loss (P & G) - P / L

As already explained, the exchange rate represents the value of a major currency in relation to the secondary currency. Since the opening of the store, a certain amount of trade in the central and at the end currency trading is done in the same amount, the gain or loss generated in this cycle (opening and closing) will be in the secondary currency.

For example, if a trader sells 100,000 EUR / USD to 1.2820 and then buys 100,000 EUR / USD to 1.2760, its net position in EUR is zero (100,000 to 100,000), but its position is not USD. USD position is calculated as follows: 100,000 x 1.2820 = $ 128,200 100,000 x = 1.2760 long - 127,600 short. The gain or loss is always in the second currency. To simplify reports P & G usually shown in USD. In this case, the profit in the store is $ 600.

basic concepts

Pip - represents a change of exchange rates with one decimal place. It is the smallest unit of exchange rates. Pip is the last decimal currency in comparison. Typically, this is the fourth decimal place, but the taps represent a hundredth of one percent, or 0.0001. For this, there are exceptions, such as currency pairs involving the Japanese yen. These pairs are expressed with only two decimal places, but in these cases, PIP refers to the second, the last decimal place.

Stop and Limit - Orders

Often a trader wants to limit the loss on a position that opens (in this case, he puts the order "stop") or wants to take profits on some level that is acceptable to him (in this case, he puts the order "limit").

common terms used for the purchase order, - long

common terms used for the sales order, - short
Bid - the price offered,
Question - price claimed,
Purchase - Sale,
Sell - selling,
Spread - the difference between the sale and purchase price,
Graphic - Graphic
time frame - time,
Chandelier - candle,
G5 - United States, Germany, France, UK, Japan,
G7 - the US, Germany, France, UK, Japan, Italy, Canada,
G10 - G7 + Belgium, Netherlands, Sweden.

What are the advantages of the Forex market compared to other investment markets?

- It is possible to carry out large transactions with a small stake. You can invest in several markets simultaneously.

- You can limit the loss and gain of placing Stop Loss and Limit Profit functions in their tasks.

- Other markets are for a limited time while the foreign exchange market is not. It can operate 24 hours a day, five days a week.

- In other markets gains especially when the price rises. In the forex market, you can earn and when courses and prices fall.

- Markets with a small number of participants and low trading volume are easily manipulated. In the currency market, it can not be manipulated by a large number of investors around the world, an unlimited geographic area of Japan and Asia to Europe to the United States, and a large volume of operations.

- The world currency market is the most fluid there.

What do I need to trade Forex?

Before you start trading currencies, you must open an account with a broker.

Otherwise, what exactly is a broker?

In simple words, a broker is a person or company that buys and sells orders (order) in accordance with the decision of traders. Brokers earn money by charging a commission or a fee for their services.

You may come to feel overwhelmed by the number of brokers offering their services online. To be chosen for a particular agent, you need to research and explore a bit, but this time is used to get an idea of the services that are available to you as well as understanding the fees charged by brokers.

We recommend that before making a decision on trade in Forex, open a demo account with one of the brokers to use the platform as long as you monitor market activity and learning.

Conditions for success

There are the basic components necessary for success and almost all experts agree on this: You must have a good knowledge of technical and fundamental analysis and managing your account. You should know the psychological aspect of trading and discipline

For success can trade Forex is a world of education, extensive analysis and monitoring hours a lot of relevant and potentially relevant information, and all this without any guarantee that the right decision is made. So once again confirmed the rule of investing: to achieve high performance must be accepted and a great risk

Before making a decision about trading Forex need to know that of all traders, forex participants, only 10% of people actually earn in this market, and the remaining 90% are losers.

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