First Touch With Forex Trading

After reading or find out a little about forex, you probably know how big potential profits in the forex trading market. Hmm ... quite large in your mind. Large enough to meet all of your dreams and it feels good to be pursued.

Well, there's nothing wrong with all that knowledge. So too with your wonderful dreams. Everyone has the right to have the dream to live well established and become financially independent.

But that is just sweet things sepenggalan in the world of forex. An ideal final objective. And maybe when asked further whether the forex trading, you may be confused.

"What forex it is equal to the money changer?"

"Or a trade like stocks?"

"Where can I get benefits?"

"What is it legal?"

"Get lost"

"Or what?"

Wait ... I know you have many questions. All these questions will be answered on this website.

Well, then let's just begin our first introduction to forex trading.

To facilitate your introduction with forex, I would have said forex trading with stock or money changer. This is due in large part to know what that money changer or also trade stocks (if you don't know, go to a money changer and ask the clerk there Cool).

If anyone asks me what is forex trading then the answer can be very varied. But I liked this simple definition: forex trading is an investment instrument in the form of foreign exchange trading pairs. Forex has some other name like Fx, margin trading, or even Trade Forex. It was all more or less refer to forex trading.

Advantages in investing forex (forex is an abbreviation of FOReign Exchange) were obtained from the difference between the buying price and the selling price of a currency that we are operating with.

Simple example:

In the past month Amir bought as much as $ 1000 US Dollar with Exchange rate buy Rp. 8500,-then this month the exchange rates of the USD strengthened to Rp 9500,-per Dollarnya. When Amir Dollarnya sell this month he obtained a profit of (9500-8500) x 1000 = Rp. 1,000,000,-easy isn't it?

 

Why, if so the exact same forex with time we exchanged money at the money changer dong? Yes indeed similar. Hence My earlier analogikan of forex trading in the money changer. Looks like it's not the same. So there is a difference. The main methods are made with forms of margin trading and no surrender of goods physically.

Trading Forex is traded in pairs commonly called currency pairs. For example, the USD/JPY pair means exchange rate between the US Dollar and Yen Japan. O Yes, before I forget, there will be some term or abbreviation that will we find in the world of forex. We have to figure it out, but don't worry, I've prepared a dictionary term in the other page.

Among the investment instruments on the trading floor, forex trading is the greatest instrument kapitalnya. Trading volume of about US $ 2 trillion (remember, in US dollars) it about 46 times greater than exchanges of commodity futures markets (such as rubber, coffee, gold, etc), etc. Or thousands of times larger than the total transactions at the Jakarta Stock Exchange!! With the capitalization of it, then known as the forex trading market is the most liquid and largest in the world.

Only 5% of the funds above which is a government funding of routine nature. the other 95% of the world free from many investors. The biggest markets completely and deeply pluralist. Another plus is that forex trading is an investment instrument that is active 24 hours a day and 5 days a week. Starting from the markets of Europe, America, Asia and Australia. So unlike the Jakarta Stock Exchange which can only Transact in daylight, on the forex trading (especially on online forex trading) we can make transactions anytime and anywhere.

Not all currencies can be traded here. Only a few developed countries currencies commonly used i.e. USD (US Dollar), JPY (Yen Japan), GBP (United Kingdom Pounds), EUR (Euro), CHF (Switzerland Francs), and the AUD (Australian Dollars). So when we invest in the forex trading market, then we will not find pairs of IDR (Indonesian Rupiah) with USD. There are currency pairs that I mentioned earlier of EUR/USD, USD/JPY, CHF/USD etc. Remember our initial definition, forex trading is trading foreign currencies with other foreign currencies.

This is one of the difference between a money changer in General. If you go to a money changer and exchanging Rupiah with dollars, then it means that you make a transaction with a pair of IDR Indonesian Rupiah alias/USD with the US Dollar.

This never happened in forex trading. Traditionally, the currency is traded currencies of countries that are fundamentally has advanced with a large import export volume as well as stable.

The next trait in forex trading is her physically had never traded. Yup, never. Different if you had to go to a money changer and swap Your Dollars, then you are required to carry it in my pocket you physically.

Well, on the forex, and selling done physically. Listed are merely evidence of the transaction as well as when You make a transaction. The days of old (such as fairy tale just end J) of all forex transactions are written in the form of a letter beharga. Then after the phone usage is widespread, only scaled down transactions into evidence writings commonly called short quotes. From this was born the term Dealing Quotes (DQ).

Well, now the forex trade are no longer carried out via telephone. Already outdated. Now his time online. Then all manner of transactions and evidence of any transactions conducted online. You simply fill in the user id and password provided by the platform provider (in this case called a broker or broker) then, click ... and there all the details of your transaction.

It is very ease to everyone in forex trading because as such anyone can Transact and Moreover, such transactions are no longer limited by place and time. Apropos is handled by the system and no longer via telephone that in fact should be held by a human (dealer) then the investor can invest forex anytime he wants 24 hours a day with ease.

In fact I know several housewives who play forex trading through his home. With internet on their laptop or home computer, then their action is started to analyze the movement of hara. Mothers lho ... So if you and I are already working and become employees of the Office knows no shame, dong ah forex at this modern mothers, he. ..he he ... ...

Ok, this discussion was about the First Touch With our Forex Trading. One of the most prominent in the world of forex trading model is done with margin trading system. Margin trading is a trading system using only a guarantee only in trade (margin = guarantee).

 

This contrasts with the trading system with the method of the usual spot we do everyday. The intent is to Spot trading system is one single Exchange rate.

Getting confused? Ok then let's see a real picture in the world of foreign currency exchange on a daily basis. Again I contrasted to foreign exchange trading through money changers with forex trading. Yet another money changer [...] Sorry for once it seems this money changer. We wish all readers no one opens a money changer in the world of business. If he can't hit My complain. Business people bad-mouth

Let me give a simple overview yet of real. I take the example of a pair (pair) GBPUSD currency. This means that the United Kingdom pound Sterling currency compared with the u.s. Dollar.

At the time this article was created, the exchange rate is the USD $ 1.9650. That means United Kingdom 1 Pound equal to US $ 1.9650. Usually these currency movements more or less subjected to movements of 100 points each day. So, the next day say the exchange rate USD to 1.9750. Do you know how big a profit when You trade with and without margin trading?

Now let's discuss one by one. The first one without the use of margin trading system or trading Spot.

Because we know the prices will move up, then to gain an advantage is to do action to buy. Buy cheap and sell expensive.

Spot Trading Example

Let's say that you buy a Fund as much as 100 pounds for a profit. Then the magnitude of profit is (1.9750 — 1.9650) x 100 = 0.01 x 100 pounds = 1 pound sterling. Ehmm ... Why do small huh? Yes indeed small, wong's motion is not a big currency-large very per day. If you want to profit big Yes do not with a capital of Just 100 pounds. How about 10,000 pounds. Well it means we can fortunately 100 Pounds with the same movements as the previous example.

Well, this new felt. Fortunately, 100 Pounds, or if the Rupiah, about $ 150 (1 Pound = $ 15,000).

Yes, fortunately indeed big, Rp 1.5 million. But the capital's , 10,000 pounds! More or less Yes USD 150 million to benefit Rp 1.5 million. One day just a 1% profit! That is true enough. I use my money to buy a house or at least a dream car than on the main foreign exchange model here!

 

Yes that's the model Commerce Spot. This name is a system of Exchange trade with one. It means to earn as much as 10,000 Pounds You are obliged to pay the same amount as well. Not effective if viewed from the side of capital and profits. That's why you rarely find them who invest foreign exchange spot trading, with the exception of very large funds are involved.

In addition to the calculation of profit is indeed a perseng not to do, seen from the capital was in need of funds not less.

Example Of Calculation Of Margin Trading

Well, this problem remove the margin trading by using a model of a guarantee. The same case and indeed the way out more or less the same. It takes 10,000 pounds if you want an advantage in sufficient amounts.

 

But get there alone, with margin trading, you don't have to pay 10,000 Pounds to buy 10,000 pounds. That is, you just simply removing the collateral only. What is the amount? Yore needed a guarantee of 10% to get the whole part. That is if you want to buy as many as 10,000 pounds, you simply issue a 1000 Pound only. Yes at least had diminished considerably compared to the original.

But still great. 1000 Pounds means Rp 15 million.

This guarantee return of eventual was reduced to 5%. And last after a request here and there, now most forex trading provider warranties that are small enough to be able to perform a purchase or sale. Just 1% or sometimes referred to 1: 100 (the ratio is called leverage/leverage)!

It means that when you want to buy as many as 10,000 Pounds, you can simply eject as much as 100 Pounds or approximately Rp 1.5 million. Lot cheaper right?

Any profit the amount fixed: 100 Pounds or Rp 1.5 million. Wow, with a capital of Rp 1.5 Million we can benefit Rp 1.5 million within a day. That means profits reaching 100% in 1 day! Really incredible.

Well that was an excess of margin trading. Something impossible done by conventional trade. But wait ... What a broker does not leave it to the loss of our 10,000 Pounds while we just simply issued a $ 1.5 million? Not at all. Remember the discussion above, forex trading is not done physically. That means Brokers won't have to hand over the money as much as 10,000 Pounds to the buyer because all transactions are not done physically. So, solved the unbalance trading margin of profit loss percentage.

Ok. Margin trading becoming gods helper in our sessions this time around. Later we will learn together that turns out margin trading is actually a double-edged sword blades the same sharp. Logically if margin trading can enlarge your profits, then the margin trading can also enlarge your losses. We're going to see later. But this time the session up here.