Forex is an international exchange market where one currency is traded for another. World currency market Forex allows participants to make the exchange one currency for another on the constantly changing exchange rates.
Online forex trading - is buying and selling foreign exchange contracts in order to profit from change over time in rates of various currencies. Trading contracts on the Forex market performed through brokers, which are traded currencies at prices reflecting market conditions at the current time. The essence of trade is as follows: the investor, placing on deposit with a broker mortgage funds, is able to manage the trust loan broker, who is 20-500 times the amount of mortgage. Everyone can participate in Forex, trading through Forex brokers.
Much of the market consists of currency speculators who profit from get movements in exchange rates, as well as speculate on movements of stock. Currency traders can take advantage of even small fluctuations in exchange rates.
Exchange rate fluctuations are caused by actual monetary flows, which depends on global macroeconomic conditions. Forex news highlights public so that all people receive the same news at the same time.
Unlike other financial markets, which operate in a centralized location, the global Forex market has no central location. It is a global electronic network of banks, financial institutions and individual traders Forex, are all involved in buying and selling of national currencies.
An important feature of the Forex market is the fact that he works 24 hours 5 days a week.
Today the Foreign Exchange Market forex is the largest segment of the global financial market, as has a turnover of more than 3 trillion dollars per day that much more speed other world markets. peculiarity of forex market is the fact that to profit in the forex market can not only banks, but the investor companies and the big players, but individuals selected Forex traders have little savings. Such an opportunity arose through a mechanism of financial leverage, which increases the purchasing power of the trader in hundreds of times. Transactions in the forex market can be from home, or combining with the main job. Enough to have a computer and internet access.
Every second of the FOREX occur are hundreds of deals on buying and selling currencies.
The market price of currency is determined by the interaction of purchasers and sellers in the forex market. Currency transactions in the forex market is conducted to ensure international trade, investment and implementation of speculation. All day traders make speculation for profit on the forex market.
Traders, who correctly to predict exchange rate, enjoy higher profits. At the core profitable activities in the financial market is based on two principles: "buy cheaper - sell expensive" and "sell expensive - to buy cheaper". To follow them, you must correctly predict the decline or growth of one currency against another.
The international currency market Forex is an OTC market and operates around the clock throughout the world, that enables traders making money at any time of day and night.
Trading starts in Asia early morning, then after the opening of financial centers moved to Europe and later in America.
Forecasts in the modern economy is not easy. Orientation in predicting a drop or increase in rates will help you analysis.
There are two basic methods of construction forecasts. This is the fundamental analysis and technical analysis.
There are several major aspects of Forex trading. About them should know the trader:
The understanding and study of these fundamentals of trading is very important in order to get profit from trading in the Forex market.
Fundamental Analysis Forex
Fundamental analysis - a process of market analysis, which is produced by studying only the "real" events and macroeconomic data relating to the currencies traded. When predicting the behavior of exchange rates should take into account many factors that affect exchange rates:
Relative interest rates
Interest rates serve as an indicator for evaluating investments in various currencies. If foreign currency loans granted by a higher rate than loans in local currency, then surely it makes sense to lend in foreign currency. In practice, the currency with higher values of interest rates rising in value against other currencies as a result of increased demand from investors.
Purchasing power parity (PPP)
This figure reflects the relative purchasing power of different currencies. It is determined by comparing the prices of the same goods in different countries in terms of "base currency", which is usually the U.S. dollar.
It is generally accepted that economic conditions are a major factor which influences the exchange rate in the long term. Most important is the trends in indicators such as: balance of payments, economic growth, inflation, unemployment, tax rates.
Demand and supply of capital
Unexpected changes in demand and supply in the capital market affect the interest rates of the interbank market, which affects the rates of exchange rate.
On the foreign exchange market (trading currency) can influence and political factors, such as: Economic policy, Central bank policy, the instability of political situation in the country, the involvement of the central bank in the currency market to weaken or strengthen the country's currency (foreign exchange intervention)
This factor has an impact on short-term behavior of the exchange rate and is determined by the views of market participants on the prospects for movement in exchange rates. Traders react to news about the state of the economy of the country. Sometimes they expect changes or important statements of the Government and begin to sell or buy the currency before the onset of actual events. News influence on the market on the background of already existing sentiments.
Fundamental analysis is the most natural way to predict the behavior of the market Forex. In theory, enough only to him, but in practice it is often used in conjunction with technical analysis.
Forex Technical Analysis
Technical analysis - a process of market analysis that relies only on numerical data on the market - quotes, charts, indicators, volume of supply and demand, past market data and other proponents of technical analysis based their predictions on the basis of a study of movements of the market for previous periods. Under the movements of the market to understand three basic types of information: the dynamics of the exchange rate, the total number of transactions for specific periods of time and the number of positions are not closed during the trading session.
Technical analysis is built on three basic principles:
Market movement considers everything
The essence of this assertion is that any factor influencing the exchange rate - economic, political, psychological - previously considered in its schedule. Therefore, the study schedule of prices - a prerequisite for forecasting.
Prices move with the trend
Trend - a definite direction of course. The main task of technical analysis - identifying the trend, for use in trade.
Technical analysts attribute this to the fact that human psychology remains the same. In essence, technical analysis is engaged in precisely the history of certain events related to the market, and hence the study of human psychology. So, understanding the future lies in exploring the past.
Psychology of Forex trading
When to buy and when to sell?
Knowing the exact answer to this question would make you the richest man in the world. Control your emotions traders often overlooked, although it is - a necessary step to good trading results in the dependence on reason and intuition, rather than fleeting impulses. Controlling emotions in Forex trading is finding a balance between greed and caution.
Money Management in Forex
Even if you master all the possible methods of market analysis and will make very accurate predictions of future behavior of the market Forex, you do not earn lots of money without a proper money management strategy.Managing capital market Forex - a comprehensive set of rules that you develop based on their own trading style and amount of capital. Money management plays an important role in making profits on the Forex.
Every Forex trader needs to have a Forex broker, and the internet - Online forex brokers. It's a company that will provide you with information about the market in real time, as well as carry out your trade orders in the market Forex. Forex Provides tools that help you in technical analysis that will improve your trading results:
Advanced trading platform
Free demo version
Choose the right Forex broker is one of the most important conditions to achieve success.
For novice forex trader, I recommend Dealing Center InstaForex.
How to start making money on forex
Everyone has the opportunity to get their profit by participating in the purchase and sale transactions of foreign currency of any country. FOREX is currently the fastest way of enrichment through the Internet. Transactions in the forex market can be from home, or combining with the main job. To start making money on forex, enough to have a computer and internet access. Here, in a relatively short time, you can earn big money, especially if the right to approach her, you need only the determination and confidence, backed by knowledge of the forex:
1) Most important to success in forex trading is the correct choice of their Forex broker. When searching for a Forex broker among Forex brokers, pay attention to the condition that they offer, especially to the following:
This should be a professional company with good rating, which you can trust.
Small fee (spread). Fast and accurate order execution.
Convenient methods for you to deposit / withdrawal, instant depositing.
Advanced trading platform, technical indicators.
Research online, The minimum account size, trading leverage.
Trading on the instruments, including Forex, CFD and metals.
Free demo version
2) After selecting among Forex brokers your Forex broker, open a Forex demo account - you get the opportunity to open an unlimited number of educational bills and explore trading without any risk. This is a free way to make transactions without risk to understand the rules and learn so that you earn.
3) Next, find the best forex trading strategies, forex signals - learn a simple system of trading strategies for forex trade. Learn how to use indicators, market analysts, advisers and other assistants trader. To develop its commercial strategy, find your own trading style and use your knowledge when trading the financial markets forex.
4) In its forecast, for the correct predictions, read and note the results of fundamental (News) and the technical analysis (charts).
5) In the Internet there are many automatic and semi-automatic Forex trading systems. Test these trading systems forex. With them you do not need knowledge of Forex, the system itself monitors the movement of the market.
6) Open by the expense, adding to its real money and start making deals in the forex market.