How To Start Trading The Forex Market?
What is FOREX or FOREX MARKET?
The foreign exchange market (also known as the Forex or FX market) is the largest financial market in the world, with a daily trading volume of over $1.5 trillion.
That's bigger than all the US stock and Treasury markets combined!
Unlike other financial markets which operate in a centralized location (i.e. the stock exchange), the global forex market does not have a centralized location. It is a global electronic network of banks, financial institutions and individual traders, all involved in buying and selling currencies from different countries. Another key feature of the foreign exchange market is that it operates 24 hours a day, according to the opening and closing of financial centers around the world, starting from Sydney every day, then Tokyo, London and New York. Anytime and anywhere, there are buyers and sellers, which makes the foreign exchange market the most liquid market in the world.
Traditionally, only banks and other large financial institutions had access to the forex market. However, as technology has improved over the years, the forex market is now accessible to everyone from banks to money managers to individual traders trading retail accounts. Now is the perfect time to get involved in this exciting global market. Open an account and become an active participant in the world's largest market.
The foreign exchange market is very different from trading currency in the futures market, and much easier than trading stocks or commodities.
Whether you realize it or not, you already have a role in the foreign exchange market. The simple fact that you have money in your pocket makes you a currency investor, especially dollars. By holding US dollars, you are choosing not to hold another country's currency. The stocks, bonds or other investments that you buy, and the money that is deposited into your bank account, are investments that are highly dependent on the integrity of the value of the currency in which they are denominated (US dollars). Due to changes in the value of the US dollar and the resulting fluctuations in exchange rates, the value of your investment may change, affecting your overall financial situation. With this in mind, it is not surprising that many investors take advantage of fluctuations in exchange rates, taking advantage of fluctuations in the foreign exchange market to increase their capital.
Example: Suppose you have $1000 and buy Euros when the EUR/USD exchange rate is 1.50. Then you will have 1500 EUR. If the value of EUR/USD increases, then you will sell (trade) your EUR for USD and have more USD than you started with.
example:
You may see the following:
EUR/USD was last trading at an average of 1.5000
One euro is worth $1.50.
The first currency (in this case EUR) is called the base currency and the second currency (/USD) is called the counter or quote currency.
FOREX plays an important role in the world economy and there will always be a huge demand for currency exchange. International trade is increasing along with the development of technology and communication. As long as there is international trade, there will be a foreign exchange market. A foreign exchange market must exist for countries like Germany to sell products in the US and to exchange dollars for euros.
risk warning:
Currency Trading Risks
Currency trading on margin is a very risky form of investment and should only be used by individuals and institutions who can handle their potential losses. Brokerage accounts allow you to trade foreign currencies with high leverage (up to about 400 times your account equity). Funds in accounts traded with maximum leverage can be lost entirely, and account values can fluctuate by as much as one percent if positions are held. Given the possibility of losing the entire investment, speculation in the foreign exchange market should only be carried out using venture capital funds, the loss of which will not have a significant impact on the investor's financial situation.