How Forex works
The international financial market Forex is built on buying and selling the currency of foreign countries. Corporate and private traders - sellers and buyers of currency - create currency market fluctuations that change quotes every second. The money sold or purchased with the best quote forms the trader's earnings. The difference in currency rates sets the profit.
Forex: Market description
In fact, Forex is an online system with multiple levels, where orders for buying and selling currency are submitted and accepted. Forex is not a bank or social network; Forex is an online market where thousands of participants, directly or through intermediaries, sell and buy world currency.
Market participants are:
-
large and national banks;
-
international corporations;
-
governments of the powers;
-
hedge funds;
-
private traders;
-
brokers.
Trading platform in no way limits the number of participants, but trends in it are set by significant players - banks and investment funds that trade directly and set quotes. Most often, the quotes depend on the volume of supply and demand.
The leading bidders are divided into several zones: American, European, Pacific and Asian.
The European session has the most substantial volume of transactions, while the Asian and American sessions are incredibly aggressive. New Zealand and Australia are the quietest.
Private Forex trader, as a rule, resorts to the services of an intermediary in trading - broker. The broker places a request of the trader to buy or sell currency in the Forex network and takes a commission percentage for this - spread. Communication with the broker or dealing centre also takes place remotely, through a special program with a display of currency quotations.
How to start earning on Forex
Trading Forex is open to private investors. To start trading and get the first money, you should strictly follow the strategies. Each of the strategies for earning and promoting Forex is based on key market indicators:
-
Be sure to study the market's dynamics carefully;
-
tracking changes in quotes, the time of rate changes;
-
keeping track of the time of market entry;
-
observing the maximum allowable percentage of losses;
-
capital and credit control, etc.
We recommend to use a demo account at first, to master all these strategies. In this way, a trader will learn the basic elements of trading without risk.
Brokers usually provide a demo account, while traders with a minimum budget are provided with leverage to start trading. Using credit early in your trading career is a risky step. Professionals advise not to get into debt in such an unstable and rapidly changing market like Forex.
The Forex market today is attractive to many investors. However, beginners and small traders should consider - the largest market participants set quotes and speed of operations. Without a broker, there is almost no access to real trades.