Lesson1: Summary for forex market
I will start from today lessons for forex trade starting from beginners
Forex is an abbreviated word, for the Foreign Exchange Market. The Foreign Exchange Market exists where one currency is exchanged for another, such as multi-national corporations, governments, and other financial markets. It yields an average turnover of $1.9 trillion daily.
an investor had bought 1,000 euros on that date, he would have paid 1,199.00 US dollars. If one year later, the Forex rate was 1 .2222, the value of the euro has increased in relation to the US dollar. The investor could now sell the 1,000 euros in order to receive 1222.00 US dollars. The investor would then have USD 23.00 more than when he started a year earlier, traders are basically buying and selling money in the same time. Beside of trading in pairs, Forex is also very special as it has no centralized trade location and trades are done around the clock.
Markets are places where goods are traded, and the same goes with Forex. In Forex markets, the “goods” are the currencies of various countries (as well as gold and silver). For example, you might buy euro with US dollars, or you might sell Japanese Yen for Canadian dollars. It’s as basic as trading one currency for another.
Of course, you don’t have to purchase or sell actual, physical currency: you trade and work with your own base currency, and deal with any currency pair you wish to.
“Leverage” is the Forex advantage
The ratio of investment to actual value is called “leverage”, using a $1 ,000 to buy a Forex contract with a $100,000 value is “leveraging” at a 1:100 ratio. The $1,000 is all you invest and all you risk, but the gains you can make may be many times greater.
Trade Forex 24 hours a day: In Forex trading, you do not need to wait the market to open: Every Sunday 5.00pm in
Forex trading does not require physical purchase of the currencies, but rather involves contracts for amount and exchange rate of currency pairs.
High Leverage Margin
Forex brokers offer trade margin of 50, 100, 150, or even 200 to 1 of trade margin.
Forex traders often find themselves controlling a huge sum of money with little cash outlay on the table. For example, a $1,000 in a 150:1 Forex account will gives you the purchase power of $150,000 in the currency market.
While certainly not for everyone, the substantial leverage available from online currency trading firms is a powerful, moneymaking tool. Rather than merely loading up on risk as many people incorrectly assume, leverage is essential in the Forex market.
This is because the average daily percentage move of a major currency is less than 1%, whereas a stock can easily have a 10% price move on any given day.
wait soon vip books in forex trade
