3. First Touch With Forex Trading

After reading or find out a little about forex, you probably know how big potential profits in the forex trading market. Hmm ... quite large in your mind. Large enough to meet all of your dreams and it was worth it for the intense.

Well, there's nothing wrong with all that knowledge. So too with your wonderful dreams. Everyone has the right to have the dream to live well established and become financially independent.

But that is just a piece of sweet things in the world of forex. An ideal final destination. And maybe if asked further whether forex trading it, maybe you'll be confusion.

"What forex it is equal to the money changer?"

"Or a trade like stocks?"

"From where I can get a benefit?"

"What is it legal?"

"Loss"

"Or what?"

Wait ... I know you have many questions. All these questions will be answered on this website.

Well, then let's start our first introductory course with forex trading.

To facilitate your introduction with forex, forex trading analogies I'd with stock or money changer. This is because most know what that money changer or stock trading(if you don't know, go to a money changer and ask the clerk there Cool).

If anyone asks me what is forex trading then the answer can be very varied. But I liked this simple definition: forex trading is an investment instrument in the form of foreign exchange trading pairs. Forex has some other name like Fx, margin trading, or even Trade Forex. It was all more or less refer to forex trading.

The advantage in investing forex (forex is an abbreviation of FOReign Exchange) were obtained from the difference between the buying price and the selling price of a currency that we are operating with.

Simple example:

In the past month Amir bought as much as $ 1000 US Dollar with Exchange rate buyRp. 8500,-then this month the exchange rate USD strengthened to Rp 9500,-per Dollar. When Amir sell this month he obtained a profit of (9500 – 8500) x1000 = Rp. 1,000,000,-easy isn't it?

Why, if so the exact same forex with time we exchanged money at the money changer? Yes indeed similar. So from the beginning of My last analogy forex trading in the money changer. Much like it's not the same. So there is a difference. The main methods of which are done with the form of margin trading and no surrender of goods physically.

The couple traded in Forex trading-currency pairs are commonly referred to as pairs.For example the USD/JPY pair which means that the exchange rate between the US Dollar and Yen Japan. O Yes, before I forget, there will be some term or abbreviation that will we find in the world of forex. We have to figure it out, but don't worry, I've prepared a dictionary term in the other page.

Among the investment instruments on the trading floor, forex trading is the greatest instrument capital. Large volume of trading around US $ 2 trillion (remember, in us dollars) it about 46 times greater than exchanges of commodity futures markets (such as rubber, coffee, gold, etc.) of another. Or thousands of times larger than the total transactions at the Jakarta Stock Exchange!! With the capitalization of the forex trading market is known as the largest and most liquid in the world.

Only 5% of the funds above which is a government funding of routine nature. the other 95% belong to the world free from many investors. The biggest markets completely and deeply pluralist. Another plus is the forex trading is an investment instrument that is active 24 hours a day and 5 days a week. Starting from the European markets, the Americas, Asia and Australia. So unlike the Jakarta Stock Exchange which can only Transact in daylight, on the forex trading (especially on online forex trading) we can make transactions anytime and anywhere.

Not all currencies can be traded here. Only a few developed countries currencies commonly used i.e. USD (US Dollar), JPY (Yen Japan), GBP (United Kingdom Pounds), EUR (Euro), CHF (Switzerland Francs), and the AUD (Australian Dollar). So when we invest in the forex trading market, then we will not find the pairs in the form of IDR (Indonesian Rupiah) with USD. That there are currency pairs that I mentioned earlier of EUR/USD, USD/JPY, CHF/USD etc. Remember our initial definition, forex trading is trading foreign currencies with other foreign currencies.

This is one of the difference between a money changer in General. If you go to a money changer and swap Your Rupiah with dollars, then it means that you make a transaction with a partner $/USD aka Indonesian Rupiah with U.s. dollars.

This is one of the difference between a money changer in General. If you go to a money changer and swap Your Rupiah with dollars, then it means that you make a transaction with a partner $/USD aka Indonesian Rupiah with U.s. dollars.

This never happened in forex trading. Traditionally, the currency traded currencies is just fundamentally has advanced with a large import export volume as well as stable.

The next trait in forex trading is her physically had never traded. Yup, never. Different if you had to go to a money changer and swap Your Dollars, then you are required to carry it in my pocket you physically.

Well, on the forex, and selling done physically. Listed are merely evidence of the transaction as well as when You make a transaction. The days of yore (like the fabled course would J) of all forex transactions are written in the form of a letter of price.Then after the phone usage expands, evidence of the transaction reduced just being short writings commonly called quotes. From this was born the term Dealing Quotes(DQ).

Now, trading forex is no longer done by phone. Has already started. Now his time online. Then all the ways transactions and evidence of any transactions conducted online. You simply fill in the user id and password provided by the platform provider (in this case called a broker or broker) then, click ... and there all the details of your transaction.

It is very ease all those forex transaction due as such anyone can Transact and Moreover, such transactions are no longer limited by place and time. Apropos is handled by the system and no longer via telephone that in fact should be held by a human (dealer) then the investor can invest forex anytime he wants 24 hours a day with a variety of convenience.

In fact I know several housewives who play forex trading through his home. Building on the internet on their laptop or home computer, then their action is started to analyze the movement of hara. Mothers ... So if you and I are already working and become employees of the Office does not know forex, embarrassed dong ah same modern mothers, he ... he he ...

OK, this discussion is about the First Touch With our Forex Trading. One of the most prominent in the world of forex trading model is done with margin trading system.Margin trading is a trading system using only guarantees in trade (margin =guarantee).

This contrasts with the trading system with the method of the usual spot we do everyday. The intent is to Spot trading system is one single Exchange rate.

Getting confused? OK then let's see a real picture in the world of foreign currency exchanges everyday. Again I contrasted to foreign exchange trading through the money changer with forex trading. Yet another money changer ... Sorry for once it seems money changer. We wish all readers no one opened a money changer in the world of business. If not hit My complain. Business people vilify

This video provides an explanation of what advantages Forex as investment instrument and also the introduction of Forex

Let me give a simple overview yet of real. I take the example of the pair (pair) GBPUSD currency. This means that the United Kingdom pound Sterling currency compared with the u.s. Dollar.

At the time this article was created, the exchange rate of the DOLLAR is of 1.9650. It means United Kingdom 1 Pound equal to US $ 1.9650. Typically this currency movement more or less experienced a movement of 100 points per day. So, the next day say the exchange rate became the GBPUSD 1.9750. Do you know how the magnitude of the benefits when You trade with and without margin trading?

Now let's discuss one by one. The first one without the use of margin trading system or trading Spot.

Because we know the prices will move up, then to gain an advantage is by doing the action. Buy cheap and sell expensive.

Spot Trading Example

Let's say you bought a Fund as much as 100 pounds for a profit. Then the magnitude of profit is (1.9750 – 1.9650) x 100 = 100 x 0.01 pounds = 1 pound sterling. Why small huh? Yes indeed small, motion the currency was not very great every day. If you want to profit big Yes do not with a capital of Just 100 pounds. How about 10,000 pounds. Nah mean right we can fortunately 100 Pounds with the same movements as the previous example.

Fortunately indeed big, Rp 1.5 million. But capital it, 10,000 pounds! More or less Yes USD 150 million to benefit Rp 1.5 million. One day just a 1% profit! That is true enough. I use my money to buy a house or at least a dream car than on the main foreign exchange model here!

HA ... HA ... HA ... Yes that's the model Commerce Spot. This is the name of one system of Exchange trade with one. It means to earn as much as 10,000 Pounds You are obliged to dispense the money just as much as well. Not effective if viewed from the side of the capital and profit. That's why you rarely find them who invest foreign exchange spot trading, with the exception of very large funds are involved.

In addition to the profit calculations are indeed not percent to do, seen from the side of any capital in need of funds not a bit.

Example Of Calculation Of Margin Trading

Well, this issue of eliminating margin trading by using a model of a guarantee. The same case and indeed the way out more or less the same. It takes 10,000 pounds if you want an advantage in sufficient amounts.

But get there alone, with margin trading, you don't have to pay 10,000 Pounds to buy 10,000 pounds. That is, you just simply removing the collateral only. How the magnitude? Yore needed a guarantee of 10% to get the whole part. That is to say ifyou want to buy as many as 10,000 pounds, you simply issue a 1000 Pound only. Yesat least been reduced considerably compared to the original.

But still great. 1000 Pounds means Rp 15 million.

Finally this guarantee big returns was reduced to 5%. And last after a request here and there, now most forex trading provider of warranties that are small enough to be able to perform a purchase or sale. Just 1% or sometimes referred to 1:100 (the ratio is called leverage/leverage)!

It means that when you want to buy as many as 10,000 Pounds, you can simply eject as much as 100 Pounds or approximately Rp 1.5 million. Lot cheaper right?

Profits no matter the magnitude of fixed: 100 Pounds or Rp 1.5 million. Wow, with a capital of Rp 1.5 Million we can benefit Rp 1.5 million within a day. That means profits reaching 100% in 1 day! Really incredible.

Well that was an excess of margin trading. Something impossible done by conventional trade. But wait ... What brokers do not loss handed to us 10,000 Pounds while we just simply removing the Rp 1.5 million? Not at all. Remember the discussion above, forex trading is not done physically. This means that Brokers do not have to hand over the money as much as 10,000 Pounds to the buyer because all transactions are not done physically. So, margin trading solved the unbalance of profit loss percentage.

OK. Margin trading becoming gods helper in our sessions this time around. Later we will learn together that turns out margin trading is actually a double-edged sword blades the same sharp. Logically if margin trading can enlarge your profits, then the margin trading can also enlarge your losses. We see later alone. But this time the session up here.