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What is Forex ?
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Is the international currency market is the largest market in the world,
dwarfed in front of all other financial markets.
And you will realize the magnitude of this market when you know that the volume
of trading in New York Stock Exchange's largest stock exchange in the world up
to 25 billion dollars a day while on the stock exchange trading is 2000 billion
dollars a day!! .
The word "forex" means the speculation in the foreign exchange market or the
global stock of foreign money which would fit the short word for "Foreign
Exchange market" in the English language
And be speculation by buying and selling major currencies which have the basic
share from operations in the forex market is the U.S. dollar (USD) (base
currency) and the euro (EUR) and Sterling (GBP) and Swiss franc (CHF) and
Japanese Yen (JPY).
Buying and selling those currencies and the U.S. dollar or other currencies
among themselves, which defines pairs of currencies and against the U.S. dollar
or any currency against another currency value. And considered speculative
currency profitable trade in stock exchanges, and also the most risky, because
of the rapid fluctuations in the currencies of the upward trend to trend
downward, or vice versa. In addition to the currency market there are other
types of stock exchanges are: gold, silver, oil stocks, shares and bonds,
agricultural and energy. The currency exchanges are characterized by various
indicators and technical analysis, news analysis and rapid access to the
profits.
The daily volume of currency trading in the forex market to reach $ 3 trillion
The forex market is not a market in the literal sense of the word, since it has
no center, no place has a certain exercise a trade. The trading exercised by
contacting the telephone and Internet computer at one time among hundreds of
banks around the world. Hundreds of jobs and sold dollars to buy every few
seconds, and this is what is called currency trading.
Forex market combining four regional markets: Australian and Asian, European and
American. And continue operations where all trading days of work, and the market
operates around the clock 24 hours a day. And the relative calm from 20:00 pm
until 01:00 GMT, and was due to the closure of the New York Stock eighth in the
evening and start work on the Tokyo Stock Exchange at one o'clock in the
morning.
And the prices of large multi-currency changes, which helps to do some business
operations during a single day. It is known that decreases the influence over
the financial markets, which could lead to the collapse of stock or bonds. The
forex market decline in the dollar (for example) means the price rise of the
second currency, and there is no such mention the collapse of the stock or
bonds.
Attractive characteristics of the forex market
1 - Liquidity: based on money market funds are not limited to able to open and
close any specific transaction prices of currencies at the moment. I have a high
degree of liquidity huge attraction for any investor as it gives him the freedom
to open and close any deal, any size.
2 - Hits: proportion of the work market around the time it is not the
traffickers in the market waiting to interact with a specific event, as the case
may be in the stock market and other markets.
3 - Flexibility of transactions: trading system is characterized by flexibility
in the market as it can make the deal for a limited time by former investor
desire something that can be planned in advance of his coming
4 - cost: not for the forex market is traditionally no commission expenses, or
any other expenses except for expenses - or profits - the difference between the
bid and ask price (BID / ASK)
5 - Standard price: the proportion of the high degree of liquidity in the
market, we find that the vast majority of sales operations can be implemented
flat rate, which avoids the problem of investor volatility in the market, which
offset future sale or stock exchanges and other exchange markets where they are
sold at a particular time and a specified price only a limited amount of
currency.
6 - directional market: that the movement of any of the currency market a
particular direction can be followed by a period of time. And give each a
specific currency price change with time special only thing that gives the
investor the possibility of dealing in the market with tact.
7 - The size of the margin: to be determined in the forex market the size of the
loan called the margin or shoulder only agreement between the dealer and that
the bank or brokerage office given by the director of the market and is usually
1:100 to pay any insurance customer of $ 1000 can make a deal worth 100 thousand
dollars. That the use of this margin with the large currency fluctuations make
this profitable market, but also great risks.
Wrong concepts:
There are two concepts that lay on the FOREX market first, that work in this
market resembles the play roulette - one wins a large amount of money and lose
the rest. Of course, be considerable risk. But Forex is not a game Roulette, in
the changing exchange rates play certain laws. First adopt the value of the
currency specific indicators of the economy of the country in question. Secondly
determined by the preferences and expectations of dealers in the market. Despite
the difficulty of the work expectations, but possible. The work in the forex
market is confirmed by the analysis that the proportion of positives include
more than coincidence.
Today we find that the risk and the risk is part and parcel of doing the work
actively in market conditions, which can simply say that the real amount of the
success of any project or transaction can be different from what was expected
when the decision-making. But speculation in the capital market is the most
risky and dangerous because it can be the loss ratio of the complexity and
difficulty of predicting the behavior of the market can never guarantee a
positive result. That this fact alienated many working in the capital market
although it is accessible to all thanks to electronic communication technology
and huge base for the analysis of information .
The second concept is that the profit the wrong person must necessarily offset
the loss of others. But speculation in the forex market is not in many cases at
the expense of changing currency rates, because there is a large group of
participants using currencies of change for other purposes (import and export,
investment and tourism) price fluctuations do not play for a short time an
important role for them. With the freedom to change the basic world currencies
free floating rate determined by supply and demand become the process of
changing the currency in itself a source of income, namely that the currency is
a commodity like any other commodity.
The currency market is the fact, like other exchange markets is never in
balance. The condition can be described as a state of constant search for
balance slippery slope.
What is required for success in the currency market? The basic vehicle access to
that can be formed as follows:
Predict the correct direction of change of exchange rates;
Achieve a minimum of loss when the market situation is good;
Haphazard deal with the funds used in a trade.
The prediction right price depends on the deep study of the market. Usually had
three forms of market analysis: analysis of news and analysis and technical
analysis myself. And be judicious mix, and the correct analysis of these three
is the guarantee for the correct prediction in the currency market.
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