Forex Trade Forecast

What is Forex?

"Forex" stands for foreign exchange, it is also known as FX. In Forex trading, you buy one currency while selling another.

Currencies trade in pairs, such as the Euro-US Dollar (EUR / USD) or U.S. Dollar / Japanese Yen (USD / JPY ).

Forex trading is used to speculate on the relative strength of one currency against drugoj.Devizno market is over-the-counter market, which means that a decentralized market with no central exchange.

Who trades currencies, and why?

The daily turnover on the world's currencies comes from two sources:

International Trade (5%). Companies buy and sell products in foreign countries, and convert profits from foreign sales in local currency.

Speculation for profit (95 %).

Most traders focus on the largest, most liquid currency pairs, known as the "master". These include the U.S. Dollar, Japanese Yen, Euro, British pound, Swiss franc, Canadian dollar and Australian dollar. In fact, more than 85% of daily forex trading happens in the major currency pairs.

of the world's most traded market, open 24 hours a day

With an average daily turnover of U.S. $ 3200000000000, Forex is the most traded market in the world.

put it very simply, currency trading is a way to profit from the rise and fall in the value of different currencies in the world. One currency is constantly changing value relative to another. That way you can earn money through the exchange of falling rates by rising one.

In practice, you will work with the currency pair, which may be the U.S. dollar and the euro, known as the EUR / USD pair. You'll watch as the price of a few changes according to which of the two currencies is deemed to be strengthened and that is weak. Then you buy or sell a few to profit from change.

Anyone can get into these foreign exchange trading days. Once, it is true, it is almost exclusively the province of international banks and financial institutions, and Forex traders worked on Wall Street and other major financial centers worldwide.

This has all changed now with the development of the Internet. Virtually all trading is done online, so that it can be done from anywhere. You do not have to be on the trading floor in the capital. Traders can work from their offices or from home. Individuals can also set up as merchants, controlling your account through your broker software platform via the Internet.

high liquidity

One definition of liquidity is a commodity that is a measure of how easily it can be converted into cash without affecting the value. Currencies are already in cash, so the currency is more liquid than any other commodity.

currency pairs

There are approximately 150 currencies of the world. Most countries, however small, have their own currency, although many European countries using the euro, and some countries use the U.S. dollar. However, some of the smaller currencies are tied in relation to the dollar, so it reduces the number to be able to trade.

Most traders would not get involved in 90% of world currencies that are considered minor currencies are not stable or liquid enough for serious trading. Of course, initially it is wise for a new trader to put the major currencies.

an opinion about what makes one of the major currencies may vary slightly, but generally there are seven major currencies considered. These are the U.S. dollar (USD), euro (EUR), Japanese Yen (JPY) British pound (GBP) Swiss Franc (CHF) Canadian Dollar (CAD) and Australian dollar (AUD). These combine to give the 6 major FX pairs involving the U.S. dollar:

EUR / USD, USD / JPY, GBP / USD, USD / CHF, USD / CAD, AUD / USD.

Of course, it is also possible to trade cross pairs, the pairs of the major currencies that do not involve the U.S. dollar. However, the 6 major pairs account for 90% of the funds traded in the Forex trading tržištu.Najviše pair EUR / USD.

EUR / USD is probably the best pair for Forex trading, especially for beginners. Why? There are three main reasons.

First, there is high liquidity in this market. This means that you will not have trouble getting matched and stops probably kick in at the appropriate level, which makes it more forgiving mistakes.

Second, the popularity of a couple means that the expansion of (your cost) is lower than for many other couples.

Thirdly, there is plenty of information on these currencies, so they are likely to be able to keep on top of important financial statements and events easy.

When you start it is best to stick with one pair. Although it is May seem to have more trading opportunities, if you try to apply the system on several different pairs, in fact, it quickly becomes confusing and stressful, and that is when mistakes are made. So, unless you are using a robot that can be set for another pair, but most sources recommend taking EUR / USD trading and avoid any other FX pairs for the first few months at least.

enormous influence

Take advantage of the ability to control large amounts of something with a much smaller amount. In trading, this refers to trading on margin, where you invest a small amount of money in your broker account and use it to control a much larger sum. In fact, your broker loans to larger amount, although they May or May not actually be putting money in the market, depending on their business model.

in forex trading you often can command 100 times leverage, and sometimes even 200 times your investment. It is much more than it will be offered with stock trading, and reflects the liquidity of the market and brokers' ability to use stops. This is what makes Forex trading its unmatched ability to make big profits from small investment funds.

Contract Size

understanding of the contract size (lot) is necessary precursor to understanding the need for high leverage the forex market. Each standard lot traded in the Forex market is a $ 100,000 contract. In other words, when trading a lot of the standard account, the trader is essentially putting $ 100,000 on the trade market. Without leverage, most investors will not be able to afford such a transaction. Bullion (100-1) will allow a trader at the same lot ($ 100,000) trade with the post of $ 1,000 in margin. $ 100,000 divided by 100 is $ 1,000, which is (100-1) lever means that the $ 1,000 margin to control $ 100,000 position.

Many retail Forex traders begin their trading day in a mini account. Because standard contracts in the forex market is quite large, even with (100-1) leverage, $ 1,000 margin per contract traded is still a bit expensive for some investors. For this reason, most retail brokers offering the possibility of a mini account. Lot size 0.5 or 0.2, etc.