What is Forex?



To the question “What is Forex? And how to make money on it? ”Many Internet users are looking for the answer.


The word "Forex" was born thanks to the abbreviation of the phrase ForeignExchange, which means "exchange of foreign currency."


The foreign exchange market Forex was created in 1971 so that international organizations, companies, banks have the opportunity to constantly exchange their funds at the market exchange rate. In other words, it is a market where the commodity is currency from different countries. Nowadays, international currency trading has moved to the Internet.


What is Forex? Initially, there was only an interbank computer network. But thanks to the development of the Internet, the opportunity to participate in such auctions appeared not only among banks, but also among ordinary citizens.


So, anyone can join the trading on this exchange. All Forex participants are divided into two groups:


First of all, these are active participants, or markmakers. Their task is to form their own prices. These include the central banks of countries, brokerage offices, large commercial banks.


The other group is called "passive participants."They only make deals at the quotes set by active participants. These are private investors (ie ordinary citizens), export-import companies, international corporations and investment funds. Work with these participants is carried out through Dealing centers.


What is Forex? How can a simple person or a private investor start working on the Forex exchange? The standard lot for such citizens is $ 100,000. For the average man in the street such a sum enters into a dead end. But to assist in the implementation of transactions, even with a small capital, there is just a dealing center. It gives private investors credit (leverage) for trading on the exchange, and such transactions are called marginal.


What is Forex - video.





The Forex market has its own special terminology:


A trader (currency trader) is a participant in the system who sells and buys on the market, while earning money on changes in the exchange rates of currencies of various countries. He plays with funds received from investors or with his own funds.


A dealing center is an organization that provides the opportunity and conditions for currency traders who do not have large capital to conduct transactions at the international level under the terms of margin trading.


Work with dealing centers is possible via the Internet.These companies provide their trader with a free program - a trading terminal through which all transactions are made online. With this program you can view the latest financial and political news, on which the fate of quotations depends. And for the trader, such information is useful for the timely start and completion of the transaction.


Margin trading - transactions through the use of funds received on credit. Such a loan is provided on the security of any specific agreed amount or margin. The difference of this method of marginal lending from the usual is that the funds provided exceed the amount of collateral several times.


Also, on the stock exchange any bet has two courses - the selling rate or “ask” and the buying rate or “bid”. The purchase rate is the cost at which the other party determining the quote buys the base currency from you. The selling rate is, accordingly, the cost at which the other party determining the quotation sells the base currency to you.


What is Forex? Those who want to become a currency trader want to understand what the pros and cons of such work in the Forex market.


Let us list the advantages: this type of earnings is one of those that guarantees decent and steady income, despite changes in the economic situation in the country. Currency traders work for themselves. This is great for those who do not like to work in a team. They have no subordinates, you can build a working day schedule of your own according to your wishes and possibilities - the exchange works around the clock.


There is no competition. Ordinary businessmen, one way or another, have to deal with the bureaucratic bureaucracy - there is no such thing here. This type of earnings can become the main profession, so there is no problem "where to find a job." Or you can become a trader without leaving your main job. A deal on the stock exchange will be additional income. Also, no one will find fault with the fact that you are not suitable for any reason, because your gender, education, age, marital status, religion, place of residence and residence do not matter here.


The only disadvantage is the risk, and sometimes the risk is very high. Also a negative point is considered a strong tension due to the almost continuous monitoring of the entire situation in the global financial and political sphere.


To start working on the stock exchange, you do not need deep knowledge in the world economy, politics, psychology, and mathematics. Also, knowledge of foreign languages ​​is not required, as a rule, everyone is afraid that they do not know English. It requires only desire, perseverance, diligence, self-discipline and the desire to learn and earn good money.


How to achieve success in the Forex market? In modern times, many Russian citizens have found for themselves a very convenient and reliable way to quickly and legally earn money with their own mind. This is a game on the Forex market. All that is needed in order to become wealthy in a short period of time is a computer with Internet access, a strong desire and diligence. But in order not to suffer a fiasco in the game and not to lose honestly earned money, you should follow simple rules to achieve success in Forex.


How to achieve success in the Forex market? From the side it seems that getting rich in the market is very easy. In fact, it is not. Losing everything here is much easier than gaining. To become a successful currency trader, to make profitable transactions you need to monitor the situation on the market,analyze it and try to predict exchange rate differences. To learn how to analyze economic situations, read more literature on this topic. In modern times there are many ways to analyze the securities market, and if a trader has knowledge of these methods (technical, fundamental, wave theory and others), then it will be much easier to navigate the market and be able to make a correct forecast for such a Forex market participant. You also need to master such a science as trading tactics.


Mainly used technical method of market analysis, that is, the course depends on various events and factors occurring in the world and having their influence on the market. After analyzing all the available information, traders make a forecast and choose the most appropriate trading tactics.


How to achieve success in the Forex market? An important factor or, let's call it the ability of the trader, is the ability to control their capital. Such quality will not allow embarking on too adventurous trading, which will avoid the risk of a high degree. Of course, it is necessary to take risks on the stock exchange, but to risk it in a big way - only very experienced and confident players can afford it.Those who have just joined the trading on the exchange market, we advise you to master all the skills on more stable deals.


Psychological preparation of the trader also makes an important contribution to the success of Forex. The most important thing here is iron logic, cold calculation and no emotions. The manifestation of strong emotions leads to rash, impulsive actions, which can often lead to the loss of all capital.


So, for successful and profitable trading in the Forex market you need to be confident in your abilities always. Confidence must be present in everything that you will work and earn well, even despite the inherent losses of such work.


The stock market is ready to work only with confident people. It is necessary to strictly obey all the rules of the "game" and adapt to different situations and changes. It is necessary to constantly improve your experience and replenish your stock of knowledge. For this you need to work and learn. The rules dictate the market, and if you go ahead, against the current, you are unlikely to achieve good results. The market will not work with such participants. Compliance is a very important part of the market,this allows ordinary people to earn decent money and help not to lose them.


How to achieve success in the Forex market?It is also important to find a good partner for yourself, that is, a dealing center or a reliable broker.


All brokers can be divided into groups:

  • 1. Market operators. These include commercial large banks. They provide the highest percentage of reliability. To work with such a broker, an ordinary person needs to have a tidy account. It is unlikely that among the majority of traders there are such rich people. The minimum lot for banks is the amount of 1,000,000 US dollars.
  • 2. Market makers. These include financial firms that provide services for dealing centers. Also provide an opportunity for traders to trade. But a trader must have a capital of at least $ 50,000. Market-makers are some Russian banks.
  • 3. Small brokers. These include non-major brokerage firms. They provide services to ordinary people who want to try their hand at the exchange currency market Forex, become familiar with it and acquire the initial skills of a trader. In this case, the equity of an ordinary person may be small, from one hundred to several thousand US dollars.
  • 4.Kitchens are the most common group on the territory of the former Union. It is based on the principle that many players still lose, and its income comes from customer losses. They get their profit until someone starts to win. In this case, the "kitchen" stops its activity, and after a few months it opens again, but under a different name. Such firms receive the most part of the profit from losses of private investors on transactions, and not from commissions or from spreads.


All brokers are different, you can find a lot in common in the approach to work between market makers and small brokers. Sometimes such organizations resort to using different ways of working.

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