The word Forex means currency. Currency trading is an unregulated market. Billions of dollars are exchanged daily in the currency market. The Forex business revolves around buying and selling one currency in exchange for the other.
The mechanism of work in forex is very simple. The forex gain depends on the speculation. You buy the currency at a lower level and sell it when the currency is at a higher level.
So, the basic concept is that if you rightly speculate that the US dollar will rise, you will buy that currency. And then, when the US dollar rises, you sell those dollars at a higher price.
However, before jumping into the largest financial market in the world (the Forex market is even bigger than the US stock market!), You must understand some basic facts about the currency business.
Forex Trading Business – Learn the basics
Before starting to trade in the forex market, it is advisable to learn the basics of trade. We will briefly explain the basic rules and terms of the business.
The working procedure of foreign exchange operations is largely similar in comparison with other financial markets platforms. But, there is an important difference. In currency trading, buy and sell currencies at the same time.
Here the coins are quoted in pairs. For example, you have to buy pairs like USD / EURO or EURO / JPY. The existing exchange rate will determine the purchase price between the two currencies.
2. Hours of Forex Trading
Unlike other markets, currency trading operates 24 hours a day and night. However, Saturday and Sunday are closed.
3. Risk factor
Forex is an extremely volatile market. There is a considerable amount of financial risk in this trade. Therefore, if you do not have money that you can afford to lose, think twice before jumping.
4. Forex brokers
You can not change your own currency. You must have to take the help of a broker. You have to select a forex broker and open an account with them. The good news is that you need to invest a lot of money to open an account today. You can open a forex trading account, even with a minimum of $ 5.
In general, all forex brokers will provide you with a trading platform in which you can deposit or withdraw money for the purchase and sale of currencies. They will help you provide information on technical analysis.
Pip is the most used word in forex trading. It is the lowest currency exchange unit. For example, if the value of the USD / EUR pair is between 1.52222 and 1.52221, the difference is called 1 Pip (1.52222 – 1.52221 = .00001)
Spread is simply the difference between the purchase price and the sale price. It is, you can call it a broker’s profit.
There are many other terms such as lots, graphs, reading quotations, orders, etc., that you will learn when you start to operate.
If you are just a beginner, and just think about the idea of Forex trading, working with a broker is a good option.
There are many Forex broker buying and selling platforms that you can consider. However, before finalizing, review several forex forums and review existing users.
When the forex agent finishes, start by opening a demo account or practicing an account. Get used to the procedure and then start investing. Renowned currency brokers such as Easy Markets, XM, FXTM, etc. they will provide you with a demo account.
Finally, our advice before entering the forex market is to verify your financial resources. Forex is not a scam. However, the foreign exchange business is volatile and risky in nature. Never invest money here if you do not have extra money to pay for high risk-oriented profits.
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