Forex Trading or Foreign Exchange is trading the currency of one country to another .
briefly Forex trading is a Buy activity (purchase) or sell (sell) the continuous and consistent currency for profit. Or can also be interpreted as forex trading is essentially an activity to exchange currencies with each other continuously for profit.
The Forex market is often called the forex market is a huge market with liquidity is very high (can deposit and withdraw at any time), which operates 24 hours a day. This is not a market in the traditional sense because there is no central trading locations. Most trading is done through electronic trading networks. The foreign exchange market allows businesses, banks and other financial institutions to buy and sell foreign currency in large amounts.
The main market for the currency market is "inter-bank", where banks, large companies and institutions large financial institutions to manage risks associated with fluctuations in exchange rates
major currencies
following are the main currencies traded in the market and symbols:
the US dollar (USD)
the Japanese Yen (JPY)
Euro (EUR)
Canadian dollar (CAD)
Australian dollar (AUD)
Swiss Franc (CHF)
Pound (GBP)
pLAYERS oN
in general, the Forex market participants to various groups such as:
-Client
-Bank and financial institutions
-Broker
-Pemerintah
business agent of
-Spekulan
clients, including multinational corporations, to participate in the foreign exchange market, because they need foreign currency for their trade in other country. For example, a particular company based in the UK need to use the foreign exchange market to buy the currency they need to pay with their counterparts in other countries that sell heavy equipment.
Banks and financial institutions are the most active participants in the foreign exchange market. They deal with other financial institutions to apply for exchange rate and can buy the currency they need in the forex market. The interbank market is a market where large BANK2 transactions between them and determine the price of the currency to be similar to that individual traders that we are on the computer screen.
Bank, in general, act as brokers buy / sell currency supply / ask. One way that banks make money is to sell the currency at a higher price than he bought to its customers. Because the forex market is not centralized decentralized alias, the natural thing given the bank to another bank is a slight difference in the exchange rate
Broker is a company with computer software or links telephone lines to banks worldwide. It is the job of forex broker to find out what the bank has the highest rate to buy the currency and that the bank has the lowest rate for selling the currency.
The government, are the most influential forex players, in addition to the central bank. In many countries, the central bank is an arm of government and carry out its policies with the government. However, some governments feel more independent. A central bank is more effective in the performance of its functions to stimulate the economy. Regardless of how indipendennya a central bank, government officials generally regularly consult with the representatives of central banks to discuss monetary policy. Thus, governments and central banks usually have a package in terms of monetary policy. The central bank is often intervene in the market for the purposes of the economy of a particular country.
business performer, is one of the largest customers of these banks, those involved in international transactions. Both companies sell products to an international client or buying goods from international suppliers, they have to deal with the volatility of currency fluctuations. Uncertainty becomes something detested by management, as well as business owners. Facing a risk is a big problem for multinational companies. For example: a company in Germany ordered equipment factories in Japan to pay yen in 1 year from now. Because of the exchange rate can fluctuate wildly dg all year, the German company will not know if the future will issue a euro more or not at the time of subsequent delivery. One way for companies to reduce uncertainty for currency risk is to go on the spot market and transactions directly to the foreign currency they need. But, unfortunately, companies may not have enough cash to conduct transactions in cash or will not contain the amount of foreign currency that is a lot for a long time. Therefore, companies often implement a hedging strategy to lock specific currency at a position of a price for this in the future.
Speculators, they are not men coverage that are not subject to price movements for reasons of international transactions, speculators try to make money by taking advantage of price fluctuations. One of the most famous speculator George Soros possible. Millionaire who is known for speculation a decline of sterling moneymaking $ 1.2 billion less than a month! Some critics say that these people are responsible for the Asian financial crisis of the late 0
The advantages and the ease forex trading online :.
1. Open 24 hours or 5 days a week.
2. Transactions may be executed at any time, anywhere via the Internet.
3. Liquidity is very high with the number of broker / dealers who play in the forex market, ensuring positioned a price we can perform operations, and no need to wait.
4. Transaction costs Brokerage commissions are relatively low, even for online trading through the internet without transaction fees but are charged only for the amount of variety. And the gap is too small.
2 5. Potential benefits direction (up or down) Have a good profit potential in a strong currency and the currency weakened.
6. Ease of margin trading is to make the purchasing power margin exceeds the amount of capital held.
7. capital or initial fund that varies in development now, with a capital of $ 1 we can already start trading. Some even offer free initial capital.
8. Equipment for training with real data, but with virtual funds (demo account)
When can you trade forex?
Forex trading has several advantages over products of other financial namely:
24 hours: trading can be done 24 hours a day from / to Saturday from Monday
to from the market in New Zealand and Australia 05 hours: 00 to 14: 00 pm
and in Asian markets such as Japan, Hong Kong and Singapore hours 7:00 to 4:00 p.m. pm
and European markets like Germany and the UK hours 1:00 p.m. to 10:00 p.m. h
for the hours of 8:30 p.m. to 10:30 p.m. US market.
for the time interval that this length, you can adjust when negotiating with your free time
How forex trading :.
The advantage of higher prices
price or exchange rate GBP / USD is now 1.5000
This means that 1 GBP = 1.5 USD
(1 GBP (pounds) if exchangeable USD (dollars) to 1.5 USD)
now I have a principal amount of $ 150
I predict that the exchange rate GBP / USD Up
what I do is BUY GBP / USD exchange dollars or I became books.
After the exchange, $ 150, I changed to 100 pounds.
After an exchange rate of one hour GBP / USD rose to 1.7000
Meaning 1 GBP = 1.7 USD
what do I do now is SELL GBP / USD or buy back 100 pounds I want to dollar.
After redeemable for 100 pounds of my $ 170 (100 x 1.7)
BUY SELL of the transaction in an interval of one hour before changed my capital of $ 150 to $ 170, which means that I get a profit of $ 20
-profit cheap:
price or exchange rate GBP / USD is now 1.5000
I predict exchange rate GBP / USD will drop
so what I do is sELL GBP / USD .. say I want to sell 100 pounds.
Because I do not have books for sale, the process is I borrowed 100 pounds of silver broker to be sold or traded in dollars.
Once bought 100 books were turned into $ 150
After an hour of exchange rate GBP / USD rose from 1.5000 is 1.4000
Meaning 1 GBP = 1 4 USD or 1 USD = 0.72 GBP
what I do now is my trade back $ 150 in books. So I mendapatlan 107 pounds.
I would now like 107 pounds .From this 107 pounds, 100 pounds, I returned to the broker, and the remaining 7 books this is my advantage.
From there SELL BUY transaction in an interval of one hour before the capital, I went from 100 pounds to 107 pounds, which means that I get a profit of 7 pounds.
in practice, it is not as complicated as explained above, because every broker provides a system that facilitates the customers.
Once you predict the price will go up, you buy. if it is indeed your UP CLOSE and you benefit The benefit is calculated from the number of points earned multiplied by the number of lots traded.
Similarly, if you predict the price will fall, you sell, if you do well you CLOSE DOWN profit.
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