Introduction To Forex Trading

The actual existence of forex trading has been around since the discovery of techniques to convert the currency of a country to another country's currency.However, in the new institutional there after the establishment of the Board of arbitration contracts (futures). An example is the IMM (International Money Market-founded in 1972) which is part of the Division of the CME (Chicago Mercantile Exchange-special product handling perishable commodities). Another example is the LIFFE (London International Financial Futures Exchange), TIFFE (Tokyo International Financial Futures Exchange) etc.

Turnover that occurs on the forex market reached US $ 5 trillion per day (a survey BIS– Bank for International Settlements – in Setember 2008). This number is 40 x greater when compared to turnover in other futures exchanges like commodities or market shares in each Stock Exchange Advanced Nations anywhere! This means that with a trading volume of this market it to its very liquid (liquid), and the control of trade could not be held by only a few Parties that have large capital. Currency movements is totally dependent on the market. There are many large or small player in forex trading, but none of them were able to control the movement of foreign exchange rates.

Often traded currencies are the currencies of developed countries such as the U.s. Dollar (USD), Japanese Yen (JPY), Japan Switzerland Francs (CHF), United KingdomPounds (GBP), the Australian Dollar (AUD) and the Euro (EUR). All currencies are traded in pairs (pair), for example, EUR/GBP, CHF/JPY, etc.

Then from which I have benefited from this investment? In simple terms, the benefits of this investment is obtained from the values of the difference when we buy and sell back the currency of the country concerned. For example, in April, Amir buy Dollar with Exchange rate of USD 8500 per Dollar as much as US $ 1000. Then at the time of purchase it was Amir spend money as much as Rp. 8500,-x 1000 = Rp 8.500.000,-and then in may, the exchange rate of the Rupiah strengthened against the Dollar to Rp.9500,-per Dollar then Amir's net profit gained when he sold the back Dollar is:(9500-8500) x 1000 = Rp. 1,000,000,-easy and simple is not it? And because it is the average time it takes to buy and sell back the currency in question is usually no more than one month, the forex trading is classed as an investment with a short period of time.

Perhaps such questions would arise from you: "then what's the difference with forex trading buy sell in the money changer?" There are some notable differences between forex trading with money changers. In addition the couple traded foreign currencies with other foreign currencies (at the money changer is usually compared with the Rupiah), forex trading does involve trade physically. And more importantly, because it does not involve physical trading, forex trading can be executed with system margin or collateral (margin trading).

For instance when I want buy US $ 10,000, then with margin trading system I simply took out her only 1% funds i.e. $ 100 as a guarantee. But the benefits I get from appreciation (increase) the Us Dollar was equal in value to US $ 10,000 that I bought.Very simple and because it does not involve trading in physical form (investors don't hold the currency bought or sold, the only evidence of this transaction only), then bail can be very small i.e. only 1% of the amount purchased.