Free Forex Training: Forex Trades Introduction

The existence of Forex trades has long been available since the discovery of techniques to convert a country's currency into another country's currency. However, the new institutional built after an arbitration body set up futures contracts. Turnover that occurs in the Forex market reaches $ 5 trillion per day (survey BIS-Bank for International Settlements, in Sept, 2008). This amount of Forex trades is 40 x higher if compared to the velocity of money on such commodity futures exchange or any other stock market in each stock exchange of any developed country! This means that the trading volume of that size, this Forex trades market is very liquid, and control of trafficking can not be held by only a few parties who have big capital. Currency movements are absolutely dependent on the market. There are many large and small players in Forex trades, but none of them are able to control the movement of foreign exchange rates.

Frequently traded currency is the currency in the developed countries like the US dollar (USD), Japanese Yen (JPY), Swiss Franc (CHF), British Pound (GBP), Australian Dollar (AUD) and Euros (EUR). All currencies are traded in pairs, for example EUR / GBP, CHF / JPY etc. Then from where I obtained a benefit from the Forex trades? In simple, the benefits of this investment is obtained from the value of the difference when we buy and sell back the currency of the country concerned. For example, in April Mike purchase Dollars with the exchange rate of JPY 100, – per dollar of US $ 1000. So at the time of purchase this currency Amir to pay as much 100, – x 1000 = JPY 100,000 – Then in May, the dollar strengthened against the Yen to JPY 110, – per dollar, the net profit that Amir got when he sold the dollar return is: (110-100) x 1000 = JPY. 10,000, – Easy and simple is not it? And because the average time it takes to buy and sell back the currency in question is usually no more than one month, then the Forex trading are classified as investments with short-term.

Forex trades does not involve a physical trade. And more importantly because it does not involve physical trading, Forex trading can be run with system margin or collateral (margin trading). For example if I want to buy US $ 10,000, then the margin trading system with me enough to spend just 1% amounting to US $ 100 as security. But the benefits I get from the appreciation (increase) the US Dollar is equal in value to US $ 10,000 which I bought. Very simple and because it does not involve trading in physical form (investors do not hold the currency bought or sold, only evidence of the transaction only), then the guarantee given to very small: only 1% of the amount that would be purchased.

If you still confused about the Forex trading system, it is better if you start a Forex training. Do not think that the training is very expensive because you can get a free Forex training online

Source by Charlie Van Houtten

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