Like any other market, for example: stock market where people trade shares that is buy and sell shares depending what they want. Similarly, people use to trade currencies pair in foreign exchange market and is known as Forex trading.Yes, in Forex market never a single currency is traded. Always the trade happens in the form of currencies pair. Simultaneously, buying and selling is done of currencies. One is buying and the other is selling.
For example:- If we talk about EUR vs USD that is EUR/USD it means we are buying Euro and selling US Dollars.We have to pay the value of per Euro in US Dollars. Say, if 1 Euro equals to 1.23 dollars (1EUR=1.23USD) then, for 100Euros we have to pay 100*1.23 Dollars.
As when we talk about FX, we always refer some or the other currency pair. In each Currency pair one is the Base currency and the other is the Quote Currency. The currency that we are buying is termed as base currency and the currency that we are selling is termed as Quote currency. For Example: in above example EUR/USD EUR is the base currency and USD is the Quote Currency.
When buying, the exchange rate tells you how much you have to pay in units of the quote currency to buy one unit of the base currency. In the example above, you have to pay 1.23 U.S. dollars to buy 1 Euro.
When selling, the exchange rate tells you how many units of the quote currency you get for selling one unit of the base currency. In the example above, you will receive 1.23 US dollars when you sell 1 Euro.
Now, the question arises how you can do Forex Trading? Then, the answer to it is very simple. Like in stock market we have number of brokers and banks that helps to trade similarly in Forex market also we have Forex brokers and number of banks that helps to do forex trading.
There are different brokerage companies that enables you buying and selling of currencies through Internet or some simple software's. For every trade you have to pay a small commission to the brokerage company that you are trading with.
You need to sign up an account with your brokerage company and then fund your account. Now you can use this amount to trade in Forex market. Whatever you earn the profit is automatically transferred to your account. And if lose something then that is also debited from your account automatically.Anytime you can withdraw your money that you have earned. If you have traded earlier in any market then, to make money becomes much easier for you in Forex market as you have an idea how the market works.
Play very safe in Forex market as you make money very easily in it, also you loose it very easily if you are new to it. High leverage margin makes it very risky though it helps the traders to trade large amount with respect to very less fund they have in their account. When you less fund and you trade more then in case you loose your money then it takes away everything from you.
You make money in Forex by buying low and selling high or selling high and buying low. This is the base of Forex. For example:- If you buy AUD against USD when each AUD is equal to $1.0204USD and then sell it when it is $1.5020USD, you have made a profit. You did buying at lower rate and sold it at higher rate and there is your profit margin.
Big Question when you trade in Forex is finding the best time for buying and selling the currencies. This is key to your money making, profit. This is the most important question to make you a successful trader.
There are two methods through which to some extent you can predict the optimum time to buy and sell in Forex. These are:
Technical Analysis deals with reading and understanding the price charts and trends of previous years. There are number of charts to make analysis of previous years. All of them you can get easily online. But you can't make any assure output by analysis of these charts. Anything is not certain in Forex market.- Technical Analysis and
- Fundamental analysis.
So, the value of USD will go higher as the demand increases as more people will be interested in buying it. If you know the effect of particular news on the market then you can easily make money in this market.
Best thing about Forex is that it is an online home based business. In this you doesn't need any recruiting, referring or advertising. You directly work on Internet alone with no Boss. If learn it properly then, you can make a lot of money online through it easily just from home.
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