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What is Forex

What is Forex

Oleh: Fajar Imam Maulna Pada 2015-12-28 20:53:41

Forex, or Foreign Exchange, is not a centralized market where traded world currencies. The forex market is the largest market in the world with a daily trading volume of more than 5 trillion dollars. This opens up many opportunities to profit from currency trading (foreign exchange/Forex). How do you do? Can be listened to with Learn forex which include some of the following.
 
 
Characteristics Of The Forex
 
The Forex market is formed from trading in The Over-The-Counter (OTC), or in other words, it is not centered. There is no specific exchanges that can be referred to as the forex Center.
Price or in exchange rates between currencies are determined from the international interbank transactions.
Forex trading can be done 24 hours a day, five days a week following the opening hours of the bank in each region of the world.
There are four trading sessions in forex. IE sessions Australia, Asia, Americas, and Europe.
Currency (Currency) in forex dipergangkan in pairs. An Example: EUR/USD, USD/JPY, GBP/USD.
Profits in forex trading can be gained when prices rise or prices fall.
The initial capital for trading forex is relatively small, ideally only around $200-500, due to leverage and margin. Any trading costs low.
The transaction can be done online with software for the desktop or the application Android, iPhone and Windows Phone.
Forex trading can only be done by brokers.
Forex trading facilities provided include financial derivatives market brokers/alternative where a wide range of other assets are also traded. In addition, there are also Currency index and the Commodity of which everything can be used as an instrument to get the profit.
 
 
How do I trade forex?
 
If you ever go to Hajj, the roads out of the country, or get remittances from abroad, then certainly you ever do a currency exchange transaction. However, the exchange rate of two currencies can vary each day, so if the condition is not urgent then you may be sifting through the day on what rate the exchange rate most of his ideal.
 
Like You would like to exchange money for 1000 dollars into Rupiah. Yesterday, 1 dollar = 13.200. Today is 1 dollar = 13.250. If it could predict the exchange rate will change once, then surely you would choose to exchanging them today rather than yesterday. The difference may be small, but the more often you Transact, the greater its value.
 
That's similar to forex trading is done. It's just not the same way, with regular Forex buy and sell through a bank or money changer.
 
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Currency (Currency) in traded forex pairs (pair) and its advantages can be obtained either when the price of the couple goes up or down. For example, if trading forex pair EUR/USD will mean you buy EUR/USD or sell EUR/USD. When a buy EUR/USD, you're basically buying the Euro and selling the US Dollar at the same time. Whereas when a sell EUR/USD, you sell euros while buying of the US Dollar. With this, either when EUR/USD EUR/USD go up or down, you can still get the profit.
 
In forex trading, it is known that such term is important for all those who learn forex, among them:
 
 
 
Bid/Ask
Bid is the price which people are ready to buy a pair of currencies in the forex market (prices as we sell a pair). While Ask is the price which people are ready to sell a currency pair (price when we buy a pair of currencies).
 
PIP/points
PIP is the fractional unit where the calculations go up/down and profit/loss in forex trading is done. For example, if EUR/USD up from 1.1191 to 1.1198, meaning no change 7 pips.
 
Spread
i.e. the difference between the Bid price and the Ask price (the difference between the sale price and the purchase price of a currency pair).
 
Slippage
that is when there is a difference between the price we want when the real price of the order by which the order was executed. For example, we order buy for pair EUR/USD at price 1.1191, but are executed at the price of 1.1195. It's reasonable to happen in certain situations.
 
Leverage
namely, the use of various financial instruments or funds loans to increase the yield potential (return) from an investment proportionally. E.g. 1:100 leverage means only with capital of 2 dollars, the owners of capital can conduct transactions worth 200 dollars. Leverage deals with the concept of margin, which in the example above then it is 1 dollar margin which we should have.
 
Swap
i.e. the charge on forex transactions that are open until past midnight (overnight) based on the difference in interest rates that apply to each currency.
 
Lot
Minimum transaction size is lot in forex. Standard lot containing $100.000, mini lot is $10.000, while a micro lot $1.000.
 
Commission Fee
i.e. a number of certain fees charged by brokers and payable by traders for each lot of forex broker in exchange-traded, the top her services