Forex trading is now open to everyone
Forex has become so easy that it allows anyone who wishes to benefit from it to achieve this. The foreign exchange market is a global market whose size, according to some estimates, is about thirty times the size of the stock market in the United States. This is one of the numbers that can be placed alongside other statistics. As someone who wants to invest in the Forex market, you must understand the fundamentals on which the currency market operates. Forex makes it easier for beginners who want to understand how the market works.
The Forex market involves buying and selling foreign currencies in pairs. For example, you are buying the US dollar in exchange for selling the British pound or selling the German mark in exchange for buying the Japanese yen. The question here may be why buy and sell currencies? The answer is simply; Is that governments and companies need foreign currencies for their purchases and payments to obtain various goods and services. This type of trade represents about 5% of all transactions in the forex market, while the other 95% are carried out for speculation and trade. In fact, companies will buy foreign currencies when their value drops in order to protect their financial investments. One of the other things that you should know about the forex market is that the exchange rates change continuously and on a daily basis. Therefore, investors and financial managers are tracing the exchange rates in the forex market on a daily basis.
Those involved in forex trading know that approximately 85% of the trading in the market is conducted using the currencies of the US dollar, Japanese yen, euro, British pound, Swiss franc, Canadian dollar and Australian dollar. This is due to the fact that these currencies are the most liquid in the world (they can be bought and sold easily. In fact, the US dollar is the most distinct currency even in countries such as Afghanistan, Iraq, Vietnam, and others).
The fact that the market operates 24 hours a day and seven days a week, this means that the trading market opens at different times in the financial centers located in Sydney, Tokyo, London and New York. Investors and speculators either respond to the permanently changing positions on which they are based By buying and selling currencies continuously. In fact, many of them work in two or more markets to exchange currencies by using some budgets to achieve profits (buying from one market and selling in another market and vice versa, in order to take advantage of price differences in making profits)
When dealing in the Forex market, one must open a margin account. To put it simply, if you have $ 1,000 that you used in a margin account that provides leverage of 1: 100, then you have the ability to buy as much as $ 100,000. This is because you only need a margin equal to 1% of the lot of one hundred thousand dollars, i.e. one thousand dollars. Thus, this means that with the calculation of the margin, a thousand US dollars will provide you with real purchasing power in your hands with a value of one hundred thousand dollars.
Since the currency market fluctuates continuously, one must have the ability to understand the factors affecting the movements of this market. This matter can be accessed through technical analysis and fundamental analysis. These two tools of trade are used in various financial markets, such as stocks, investment funds, and others. Technical analysis refers to reading, summarizing and analyzing the data produced by the market. While the fundamental analysis refers to the factors affecting the economic situation, which in turn affect currency trading. There are a number of other economic and non-economic factors that can suddenly affect the forex markets, such as the latest September 11th and the like. One always needs to have acumen, cunning and the ability to deal with numbers in order to be able to make profits in the forex market.
