Beginner’s Guide to Basic Forex Trading

Pick up forex trading now.

The name Forex comes from the currency market, which was also referred to as “Forex” or “FX”. It basically involves a currency pair. That is, you buy a currency in exchange for a currency of another country.

For example, if you visit Hong Kong from the US. What would you do? Go to the money changer, use your US dollar to change the Hong Kong dollar, right? In doing so, you will actually sell your US dollar and buy the Hong Kong dollar so you can spend it in Hong Kong. Therefore, if you return to the US, you also change your Hong Kong dollar to US dollar. You are now buying the US dollar and selling your Hong Kong dollar. By now I hope you have the idea of ​​basic forex trading.

So why change Forex, you might ask? Well Forex is a 24 hour market and is one of the largest markets in the world in terms of daily volume. The volume of trade ranges from 1 to 3 trillion dollars every day. This is 6 to 8 times the volume of the world stock market. It provides a lot of liquidity to the market. The large volume of participants also reduces privileged trade opportunities. To put it simply, there has never been a case of total currency collapse in a developed country.

For foreign exchange trading there are no restrictions on short-term sales. That is, you can buy (long) or sell (short). This means you can easily trade in a rising or falling market.

Another great advantage of forex trading is leverage. Leverage typically increases your purchasing power. With this, you can increase your overall return on investment with less cash. Of course, increasing the risk of leverage also increases. However, if you know how to manage your risk, it shouldn’t be a problem. For example, if you only have $ 1,000 cash in a currency margin account and 200: 1 leverage, you can exchange up to $ 200,000 in notional value.

Here is just some of the basic information on forex trading. To pick up forex trading, you can search the internet for more information or buy some Forex books to read. It is essential to understand the basics of Forex.