For those unfamiliar with the term, it is the Forex (Foreign Exchange), as the forex market is known, this is where you buy and sell various currencies. The currency market we see today began in the 1970s, when exchange rates and decimal places are entered into the value of currencies. Only the participants determine the price of one currency against another, based on the supply and demand of that currency.
Forex market is unique for many reasons. Regarding the freedom of any external control and free competition, so a perfect currency market. It is also the largest liquid financial market. According to various evaluations, the masses of money in the market 1 to make 1,500,000,000,000 dollars currently. It moves with so much money, it is very unlikely that someone could affect the value of a particular currency. On the other hand, market liquidity means that unlike the stock market, investors are able to open or close their positions in a few seconds, so there are constantly buyers and sellers.
The only thing in the forex market is the diversity of the participants. Investors have many reasons to participate in this market, do a bit of long-term, while others are using massive credit lines for short-term gains. This makes the Forex market an interesting one for many types of investors with different market strategies.
As the Forex
Transactions in foreign currencies are not centralized in a specific place, but are done through telecommunications. Business is open 24 hours a day from Sunday night to Friday afternoon (00:00 GMT clock on Monday at 10:00 GMT clock Friday) made. In most time zones, at no cost to list the values of the coins. After the investor wants the Forex market to know you are one of these managers to get in touch in order to perform the operation. There are also live both online. It is common practice for investors to speculate currency prices by obtaining a line of credit (there is only $ 500) in order to increase potential gains or losses. This is called marginal trade.
Marginal trade is simply the term used to refer to fact with companies borrowed money. This is due to the fact that currency exchange facilities can take place without a source of real money. This allows investors to invest more money with small transfers of costs, and always in a great place with a small amount of their current capital. Margin transactions in the foreign exchange market are quantified in batches. The term “lot” refers to $ 100,000, an amount that, at least 0.5% or $ 500 can be obtained.
Example: In detecting signals in the market, do you think that the pound sterling will rise against the dollar. Open an account with a margin of 1% over the price of the pound is 1.49889 and expect the exchange ratio to change. At some point in the future your prediction has come true and you decide to sell. You sell when the pound is at 1.5050 and you will receive more than $ 405 an investment of $ 1,000, a 40% profit. (As an example of how to change the exchange rate of the day, a daily average rate of the euro (in dollars) from 70 to 100 points).
If you decide to leave a position, the amount of the initial deposit will be returned to you and the gains or losses are calculated. Then the gains or losses are tested once credited to your account.
Investment Strategies: Technical Analysis and Fundamental Analysis
The two basic strategies to invest in the technical analysis of the currency or fundamental analysis. Most small and medium investors in financial markets use technical analysis. This technique comes from the assumption that all information about the market and a series of future fluctuations in a given currency will be reflected in the price of a particular currency. This means that it is necessary to pay attention to all the factors since they all have an effect on the price of the currency. Essentially, you have this type of investor is to meet three basic premises. They are: the movement of the market considers all the factors that the movement of prices is directly proportional to this type of events, and this history repeats itself constantly.
The fundamental analysis is the one that analyzes the current situation of the country of the currency, including things like the economy, the political situation, and other potentially important rumors. A country’s economy depends on a series of quantifiable measures such as the central bank’s interest, the national level of employment, the level of inflation. An investor can this series of signals, such as the economic impact on the victory of the two candidates in the elections and a government based on knowledge as a particular currency will take place against other currencies to anticipate.
Earn money with Forex Currency Trading
Investing in Forex is one of the most beneficial forms of investment. Even if there is a risk and it is high, it means that the ability to do non-strategic business that can make big profits with minimal investment. Another advantage of the currency is that, due to the size of the world market, no one can influence their values. The one represented by the investment in foreign currency opportunities are equal for all. When we invest in the short term in currencies, requires a degree of care, to investors who use technical analysis in their ability to daily fluctuations in the forex market to predict feels relatively safe.