What is Forex trading
Foreign currency trading is historically and geographically driven. Globally, it is a necessary element of the world economy and determines the financial stability of many countries. At the same time, trading by selling or buying currency allows millions of ordinary people to earn. It is enough to use the Forex trading platform.
Trading forex: a general principle
Forex is a modern financial market that allows you to buy and sell currency from different countries and earn on changes in exchange rates. Brokers buy currency on Forex, expect its growth rate and resell it. Differences in rates generate earnings.
Exchange markets FX - Forex - has no specific address. Buying - currency is sold on online platforms or by phone.
Trading is not limited in time; it can be provided around the clock, depending on the schedule of banking institutions in a particular region.
There are four main regional trading markets:
Exchange on Forex is made by:
banking institutions, government and commercial;
broker and currency exchanges;
Forex trader - an individual who trades on their own initiative.
How online forex trading works
The first step to currency trading is registration on the website of a broker and installation of software, the so-called trading terminal.
The order of work with the trading terminal:
clients watch the growth/decline charts;
analyze the financial market;
decide whether to buy or sell the currency;
submit a command to open a trading position; it goes to the broker's server;
the broker sends information about liquidity to the client terminal;
the client observes the price of the asset and closes the transaction when the best price is presented, or the operation becomes unprofitable.
One should not forget that each transaction is accompanied by the broker's fees, which are called spreads. The spread is calculated once at the moment of transaction opening. It equals the difference between the price set by the seller and the price the buyer is willing to pay. It is impossible to trade without paying the spread.
Advantages of Forex trading
In today's world, a business built on trading has several significant advantages over other ways of earning.
Thanks to online technologies, transactions are available around the clock and do not depend on the geographical location of the trader, operations are carried out in any place where there is an Internet;
foreign exchange trading is open to individuals who do not even have specialized education or experience;
the initial capital to start trading is $150. Also, the trader is allowed to leverage.
Trading on Forex can be combined with primary employment or transferred to a permanent and the only way to make a profit.