Currency market

Currency market

It is so natural that you heard about the currency market, also known as FX or Forex.

As we all see that many members to mention the advantages of investing in Forex. Well, actually, the authors may be right, there are more advantages than other instruments. But on the other hand, I can tell you about the many hazards, risks and tricks for forex market.

As a result, if you want to be a real forex market investor, you should not have to, you should know some points about trading forex.

Let's start talking about the foreign exchange market.

First things: A little Forex History

Well, Forex is an old bazaar. Only twenty years, the Forex market was just the national banks of countries that participated. And also we can talk about some international or multinational companies. It all had individual accounts and small investors in the exchange rate. It was generally a virtual platform that the National Bank currency exchange between each other.

After 1970's, when 1980 came, some new regulations and investments are met with forex. With these provisions, individuals, say a small-sized investors find opportunities to trade in Forex.

Trading in Forex

Because no amount of money as the National Bank, there had to be new definitions of trafficking and species profiles. So support system was born in the 1980s to people trading in Forex. With the support system, small investors find opportunity in trade. For example, $ 100,000 with $ 1000 cash in his account. That is, to this account, you can open a place that has a volume of $ 100,000 by blocking the $ 1000 from your account as a deposit to handle the exchange rate.

So as you see, even a small investor can buy or sell $ 100,000 with $ 1,000 cash in his account. I'm sure you all can see that the support system allows investors to open a position (buy / sell) easily, but on the other hand, also makes the developer to take more risks for the position open.

As mentioned above, the developer an opportunity to buy or sell some amount of currency relative to other currencies. For example, if you want to buy 1 lot of U.S. dollars against Swiss francs, it also means that you are selling 1 Very CHF against the U.S. dollar. The sayings are the same truth.

In forex, investors buy or sell currencies, but it is obvious that this should be done with money convertible units that his country has a stable economy. It is because of not wanting to have a liquidity problem after that. You have to find another investor who wants to buy what they want to sell. If not, I can not find a buyer and a liquidity problem.
And also, if countires "economy or political situation is stable and strong enough, can have very large price moves or changes occurred on values. So it's too dangerous for investors in the exchange rate.

And now, we can emphasize the obligation: reading, research for all countries the situation of politics and economics. It is the main point. An investor in the foreign exchange market must be well educated about politics and economy of all countries.

The second obligation: Finding a broker to open an account in order to open and close positions (transactions). The investor has to find a reputable brokerage firm and broker. It would be best if your broker has a future commission merchant registration in Commodity Future Trading Commission. It can reduce the risk in forex trading, but never makes it zero. Forget about zero risk.

Opening an account in a brokerage company is all about filling out complicated forms and read the instructions, terms and conditions etc. In addition, some initial deposit between $ 1,000 - $ 10,000 (depending on the brokerage company) will be offered a standard account.

Now, and 2000, online forex trading possible. There are a number of brokerage companies for those investors who come to exchange market for the first time. They can provide their new customers to simulate their accounts. This situation provides an excellent opportunity to understand and live trading as real, and allows them to have little experience.

In addition the exchange rate simulations, there are some very useful and popular tools that are always used in forex trading, such as real-time quotes, news headlines, price charts, technical analysis tools.