The currency or foreign exchange market (Forex) is the largest and fastest investment market in the world. Previously, only major investors like banks and professional traders were able to exchange this market, but with the advent of the internet and the improvement of trading platforms in foreign currency, retail traders joined this market in large numbers and these numbers increase rapidly. It has become very easy to open an online trading account with an investment as little as $ 300 .–. The reasons why this market is so attractive is to name the most important:
1. Exchanges can be made from anywhere with Internet access, which includes mobile devices.
2. Low initial investment of less than $ 300 .–. Trading is done in various lots of size. Although the standard lot is 100,000 units, a mini-batch is 10,000 units and the Microt Lot is 1,000 units of your basic currency.
3. Learning for currency trade is relatively easy, but expertise, as with another activity, takes a lot of practice. However, many trading platforms offer a free practice account with virtual money where you can harm its skills. It would be wise to practice with “money money” or “virtual money” before diving “in the law”. Most brokers have demonstration accounts where you can download their commercial station and practice in real time. Although it is not a guarantee for your success, practice can give you trust in exchange with real money. Many books and trading courses on Forex are available on and offline, some for free.
4. Trading 24 hours a day, except on weekends. However, since the exchanges include exchange sessions of the United States, Europeans and Asians, they overlap somewhat and, according to which currency pairs are negotiated, the volume of negotiation will fluctuate from the region to the region. Trading items opened on Monday 7am, New Zealand and close 17h New York Time on Friday. Meanwhile, you can enter or leave the market whenever you want, so you can choose your time and your place to exchange what you like. No matter what time of your business day, there will always be enough buyers and sellers to trade. This gives you enough flexibility to plan your trading around your daily routine.
5. High liquidity; You keep total control over your capital. The results are predictable. Currency prices are generally repeated in predictable cycles, which facilitates trends. You can get tools such as “technical analysis” to see these trends and beneficiary.
6. Transaction costs are very low; You can use a high leverage (money borrowed) with a minimum of risk. In other words, your mistakes will not cost you a fortune. Good brokers will not charge commissions to exchange or maintain an account, even if you have a mini account and share small volumes. On the other side, the gain potential is unlimited. The Forex market has a daily trading volume of more than $ 1.5 billion, the world’s largest financial market. It is born the stock market (50 billion days) and the futures market (30 billion).
7. The currency market is very transparent. This is an advantage in any commercial or commercial environment. This means that you can handle the risks and run commands in seconds, which allows you to avoid errors.
The exchange rates of foreign currency pairs float, which means that they are constantly changing according to many factors determining exchange rates between foreign currency pairs. All Forex trading are done in pairs, that is, you have to buy a currency and sell another.
A PIP, or a percentage point, is generally equal to 1/100 over 1% and is the smallest increase in trade. This makes it suitable for retail or novice traders to negotiate currencies in micro-batches because a PIP in a micro-batch is only 10 cents in the price. The losses are therefore easy to manage if a business does not produce the expected results, because in a mini-ground, a high or low PIP is equal to $ 1 and the same pip