About forex trading - forex trading coach

About forex trading ~ forex trading coach

The forex market is an international market where the money of every country is sold and bought freely. It was launched in the 1970s at the moment of introduction of free exchange rates. The price of one currency against another that occurs from supply and demand is determined only by market participants. There is no external control. Forex is a perfect market because it cant be controlled or monopolized by any of its participants. The enormous number of transactions executed day after day make it the biggest liquid financial market.
Trading is conducted all over the world through electronics networks 24 hours a day, 5 days a week starting from 00:00 GMT on Monday to 10:00 p.m. GMT on Friday. The main central markets are: Frankfurt, London, New York, Tokyo, Hong Kong, Australia, New Zeland.
One unit of the base currency is equivalent to the exchange rate in the quote currency. For example, if EUR/USD is trading at 1.2762, the price of 1 euro (base currency) in dollars (quote currency) will be 1.2762 dollars.
Forex trading is conducted through individual contracts. The standard contract size (called a lot) is usually 100,000 units. For this contract size , each pipe (the smallest price increment) is worth $10. Many companies offer mini accounts in which you can trade units of 10,000, where the pipe value is $1. Forex market allows very low margin requirements because of leverage. For a standard account size, usually internet brokers establish a minimum deposit such as $2000 for trading in the forex market and grant a leverage of 1:100. That is, opening the position at $100,000, a trader invests $1000 and receives $99,000 as a credit. Many brokers offer a mini account. The forex mini account offers smaller contract sizes controlling $10,000 units. The usual account minimum to start a mini account is about $250. With a mini account, you only need $50 as a margin deposit requirement per every $10,000 lot traded. The leverage is usually 200:1 (10,000 / 50 = 200).
Now some brokers are offering a micro account. I would not recommend these because the leverage is really high and using a high degree of leverage can be very risky. Micro accounts require as little as $25 to open and be able to control  $1000 units. The pip values, on average, are about $0.10.
The forex market is always moving. You can chose to maintain a position for a very short time or for longer periods. It will depend only on your own trading strategies.
In the forex, it is possible to perform speculative activities without the need for a real money supply. This is referred to as marginal trading. The amount required as a guarantee for the transaction is low, thus providing an opportunity to open positions with a small account in U.S. dollars and buy or sell a lot of other different currencies. Marginal trading implies operating with borrowed capital , where you need only a small percentage of the total sum of the transaction.
There are several tools that allow the trader to be able to understand and make decisions on the market, grouped basically under fundamental or technical analysis.
Fundamental analysis takes account of rumors, political events, and the local and international economy, such as, for example, the rates of inflation and unemployment, taxes, and interest rates.
Technical analysis affirms that all this information is already priced in and that the resulting reactions are visible on charts. It is based essentially on prices, time and volume. Technical analysis also assumes the repetitiveness of the market, which it most probably will perform again in the future as it has already performed in the past. It analyzes past quotes and predicts the prices to come based on statistical and mathematical calculations. Both technical  and fundamental analyses complement each other.
If you want to deepen what is forex market, look at the following link: what is forex trading.



More info for About forex trading ~ forex trading coach:

Related Posts by Categories