Forex trading online


Invest and speculate online thanks to the oscillation of the relative value of currencies: the Forex.

definition

Forex stands for Foreign Exchange Market or the virtual place (very liquid) in which you can make transactions based on the buying and selling of international currencies in order to make a profit , then mirror, taking advantage of the fluctuations in the prices and currencies.

In terms of volume of money exchanged is definitely the largest financial market in the world, more specifically it is an OTC (Over the Counter) in which trade not accomplished within a regulated market and transactions relating to currency trading takes place freely between the two parties under the terms of a contract with a broker or a brokerage firm that buys and sells orders according to the trader’s decisions, holding only a spread in exchange for each transaction, without additional cost.

The underlying purpose of the Forex is primarily to facilitate international trade and investment by allowing companies to convert one currency into another. The global foreign exchange market has been fo a long time exclusive right of specialized brokerage and the rich and wealthy, was in fact originally intended exclusively to large investors (governments, banks and multinational organizations) able to access realizing substantial cash deposits but over the years and thank to the development of new technologies and globalization has occurred an opening to private capitals, which today enables access through specialized intermediaries, even to those companies and individual consumers who wish to actively approach the world of Finance and the Stock Exchange.

Introduction to Forex

Forex (Foreign Exchange) is the trading for speculative purposes, of foreign currency. The foreign exchange market (also known as FX or forex trading, currency market) is a worldwide and more decentralized market than traditional financial markets (OTC), within which you make a currency trader. The financial centers around the world operate as a point of reference for exchange between a wide range of different types of buyers and sellers, which occurs continuously, 24 hours out of 24, with the exception of the weekend.

The foreign exchange market determines the relative values of different currencies. The main purpose of the foreign exchange market is to help international trade and investment, enabling businesses to convert one currency into another currency. For example, allows a company in the United States to import European goods and pay Euros, even though the farm income is in U.S. dollars. The forex, obviously, also supports the speculation, and facilitates the so called carry trade, in which investors borrow low-yielding currencies and lend (for investment) high-yielding currencies.

Characteristics of the foreign exchange market

The foreign exchange market is characterized by:

Huge volume of trading, resulting in high liquidity

Geographical dispersion

Continuous operation: 24 hours a day except weekends, ie trading from 20:15 GMT on Sunday until 22:00 GMT Friday

The variety of factors (macroeconomic or otherwise) that affect exchange rates

The lower profit margins than other fixed income markets

The use of leverage to enhance profit margins with respect to account size

Why invest in Forex?

Among the various aspects that characterize the forex making it palatable to a growing number of investors there is no doubt the absence of particular constraints as regards both the system of speculation, and for what concern the duration of sales (operating is possible 24 hrs a day), in addition to the large number and diversity of players in the market and the large volume of trade (which occur only in electronic mode). But what has determined the progressive popularity and extraordinary success is the principle by which you can never lose more than what you have invested while earning possibilities are virtually unlimited.

Investing in the Forex also offers a number of significant advantages such as:

low operating costs;

Non-taxable income;

no need to invest large amounts of capital;

rather small risk in the investment as the broker cannot invest in one shot more than 75% of the total capital of the customer;

immediate availability of revenues.

To be attractive to speculators, however, it is especially the opportunity to get a very high ‘leverage’ compared to other types of investment: the instrument of leverage is indeed a great opportunity that allows you to operate with a higher capital than of what you actually have, thus amplifying the possibility of return

Operate and make money with Forex

Thank to its operational simplicity Forex attracts many investors to buy or sell currency, is not sufficient to have a PC, an internet connection and open an account with your broker dealer. To get good results and in particular to achieve them, however, is very important to master and understand the mechanism that regulates it in order to acquire the analytical skills necessary to increase the chances of success, this is because it is a very fluctuating market and characterized by the sudden flexibility of the exchange rate, it is crucial to gain the ability to move their investments.

For an intelligent trading is therefore crucial to keep up to date on current economic and financial crisis, in order to always be aware of what at one time influences the performance of the market that knowledge is the basis for potential future earnings and perhaps the only truly strategic tactic to be able to acquire the ability to anticipate fluctuations in the foreign exchange market. The other crucial step to devote much attention to the choice of broker carefully studying the characteristics of the available platforms, reading and understanding well the proposed conditions and trying to choose the one that suits your needs. The choice of platform and the broker is not in fact an operation to be underestimated, because this depends substantially large part of the success obtainable in this type of activity. It ‘very important to rely on professionals who can provide the right advice in a timely manner, and prudent, to be able to offer the right tools for analysis, and that they are reliable, especially in terms of payments.

The best thing to do, especially for beginners, is to use the opportunity to practice using the demo test that almost all platforms offer to their customers, this tool works with the real simulations, allowing you to perform transactions such as those that would occur with a real account. Once you become familiar with the proper system of Forex trading is then possible in all respects begin to operate effectively as a trader.

Forex Risks

What are the risks in Forex trading?

As in all financial speculations the risk of losing money is high, there is no need to hide it, but you can have a good control if you use commercial systems suitable for this purpose. In fact, the trading system is the basis of the Forex market and one can not help but if you do not want to risk losing their entire capital. Graphs, tables and all the tools that are available online are essential to have an idea of when is the right time to exit or enter a market. A system that helps you automatically know which is the right time to get out of a difficult situation can prevent you from losing a lot of money and is one of the few ways to have a good success in the Forex market. If you are able to manage the risks the Forex market can offer the chance to earn good money in a short time, on the other hand if you do not minimize the risks you run in the possibility of losing your capital in a few moments. Having a system that controls the risks involved means that you invest a certain amount and you can not lose more than that and the system will alert you when that limit is reached, it is a valuable aid and should never be underestimated. Always remember that first of all it is best to approach this world through the Demo accounts that all brokers offer in order to understand what are the methods of the Forex market.

Forex trading , stocks or mutual funds. How do they match?

The Forex market and the stock, are two very different worlds and they are two completely different types of businesses. If they decide to trade in the Forex market most investors want a return of capital in the short time, in fact most of the business have an average life span of a single day and are closed daily. If we talk about the common stock market or mutual funds we are talking about a business oriented on a much longer time period, in fact this kind of business can also go on for years before producing the anticipated results.

What are the most popular speculators in the Forex market?

If you follow the data provided by the Wall Street Journal Europe, you get to know that about the70% of the total trade is managed by Deutsche Bank, which is included in the 17% of total trade in currencies, then we have the UBS, HSBC, Citi Group, Merrill Lynch, Barclays, Goldman Sachs, JP Morgan Chase and some other banks.