Free Guide – How To Propel Understanding of International Foreign Exchange Market
FOREX (FOReign EXchange market) is an international foreign exchange market, where money is sold and bought freely. In its present condition FOREX was launched in the 1970s, when free exchange rates were introduced, and only the participants of the market determine the price of one currency against the other proceeding from supply and demand.
Foreign currencies are constantly and simultaneously bought and sold across local and global markets and traders’ investments increase or decrease in value based upon currency movements. Foreign exchange market conditions can change at any time in response to real-time events.
The main merits of the FOREX market are:
The biggest number of participants and the largest volumes of transactions;
Superior liquidity and speed of the market: transactions are conducted within a few seconds according to online quotes;
24-hour trading, 5 days a week with non-stop access to global FOREX dealers.
The ability to profit in rising or falling markets.
Qualified work in the FOREX market can become your main professional activity;
Standard instruments for controlling risk exposure;
A trader can open a position for any period of time he wants;
No fees, except for the difference between buying and selling prices;
You can make deals any time you like.
An opportunity to get a bigger profit that the invested sum.
Unlike other financial markets, the FOREX market has no physical location and no central exchange (off-exchange). It operates through a global network of banks, corporations and individuals trading one currency for another. Investments usually deal with 4 major pairs: Euro against US dollar, US dollar against Japanese yen, British pound against US dollar, and US dollar against Swiss franc or EUR/USD, USD/JPY, GBP/USD, and USD/CHF used to sign these pairs accordingly. These major pairs are considered as FOREX market’s “blue chips”. You will not receive any dividends on the currencies. Well known “buy low – sell high” gives the profit for currency trades.
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When trading currencies, trade only when you expect the currency you are buying to increase in value relative to the currency you are selling. If the currency you are buying does increase in value, you must sell back the other currency in order to lock in a profit. An open trade (also called an open position) is a trade in which a trader has bought or sold a particular currency pair and has not yet sold or bought back the equivalent amount to close the position.
This enormous market is like the dangerous sea where you can meet lots of sharks and dangerous waters but at the same time it is the only one where two weeks of trading can hypothetically bring you $1,000,000 out of $1,000 of initial investment.
Read what is forex and how to choose managed forex trading wisely.
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