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Forex news -forex broker review => Forex => : admin 01, 2020, 06:34

: How to Make Money Trading forex
: admin 01, 2020, 06:34
How to Make Money Trading forex (http://binaryoption.ae/index.php?board=14.0).
What is forex (http://binaryoption.ae/index.php?board=14.0) trading?
How does forex (http://binaryoption.ae/index.php?board=14.0) trading work?
In the forex (http://binaryoption.ae/index.php?board=14.0) market, you buy or sell currencies.
Placing a trade in the foreign exchange market is simple. The mechanics of a trade are very similar to those found in other financial markets (like the stock market), so if you have any experience in trading, you should be able to pick it up pretty quickly.
And if you don't, you'll still be able to pick it up....as long as you finish School of Pipsology, our forex (http://binaryoption.ae/index.php?board=14.0) trading course!
The objective of forex (http://binaryoption.ae/index.php?board=14.0) trading is to exchange one currency for another in the expectation that the price will change.
More specifically, that the currency you bought will increase in value compared to the one you sold.
Trader's Action EUR USD You purchase 10,000 euros at the EUR/USD exchange rate of 1.1800 +10,000 -11,800* Two weeks later, you exchange your 10,000 euros back into U.S. dollar at the exchange rate of 1.2500 -10,000 +12,500** You earn a profit of $700 0 +700.
*EUR 10,000 x 1.18 = US $11,800 ** EUR 10,000 x 1.25 = US $12,500.
An exchange rate is simply the ratio of one currency valued against another currency.
For example, the USD/CHF exchange rate indicates how many U.S. dollars can purchase one Swiss franc, or how many Swiss francs you need to buy one U.S. dollar.
How to Read a forex (http://binaryoption.ae/index.php?board=14.0) Quote.
Currencies are always quoted in pairs, such as GBP/USD or USD/JPY. The reason they are quoted in pairs is that, in every foreign exchange transaction, you are simultaneously buying one currency and selling another .
Here is an example of a foreign exchange rate for the British pound versus the U.S. dollar:
The first listed currency to the left of the slash ("/") is known as the base currency (in this example, the British pound), while the second one on the right is called the counter or quote currency (in this example, the U.S. dollar).
When selling, the exchange rate tells you how many units of the quote currency you get for selling ONE unit of the base currency .
: Re: How to Make Money Trading forex
: admin 01, 2020, 06:34
In the example above, you will receive 1.51258 U.S. dollars when you sell 1 British pound.
The base currency is the "basis" for the buy or the sell.
If you buy EUR/USD this simply means that you are buying the base currency and simultaneously selling the quote currency.
In caveman talk, "buy EUR, sell USD."
You would buy the pair if you believe the base currency will appreciate (gain value) relative to the quote currency. You would sell the pair if you think the base currency will depreciate (lose value) relative to the quote currency.
Long/Short.
First, you should determine whether you want to buy or sell .
If you want to buy (which actually means buy the base currency and sell the quote currency), you want the base currency to rise in value and then you would sell it back at a higher price.
In trader talk, this is called "going long" or taking a "long position." Just remember: long = buy.
If you want to sell (which actually means sell the base currency and buy the quote currency), you want the base currency to fall in value and then you would buy it back at a lower price.
This is called "going short" or taking a "short position". Just remember: short = sell.
The Bid, Ask and Spread.
All forex (http://binaryoption.ae/index.php?board=14.0) quotes are quoted with two prices: the bid and ask .
In general, the bid is lower than the ask price.
The bid is the price at which your broker is willing to buy the base currency in exchange for the quote currency.
This means the bid is the best available price at which you (the trader) will sell to the market.
If you want to sell something, the broker will buy it from you at the bid price.
The ask is the price at which your broker will sell the base currency in exchange for the quote currency.
This means the ask price is the best available price at which you will buy from the market.
Another word for ask is the offer price.
If you want to buy something, the broker will sell (or offer) it to you at the ask price.
The difference between the bid and the ask price is known as the SPREAD .
On the EUR/USD quote above, the bid price is 1.34568 and the ask price is 1.34588. Look at how this broker makes it so easy for you to trade away your money.
If you want to sell EUR, you click "Sell" and you will sell euros at 1.34568. If you want to buy EUR, you click "Buy" and you will buy euros at 1.34588.
Here's an illustration that puts together everything we've covered in this lesson:
: Re: How to Make Money Trading forex
: admin 01, 2020, 06:35
When you do this, you've essentially participated in the forex (http://binaryoption.ae/index.php?board=14.0) market! You've exchanged one currency for another.
Or in forex (http://binaryoption.ae/index.php?board=14.0) trading terms, assuming you're an American visiting Japan, you've sold dollars and bought yen.
Before you fly back home, you stop by the currency exchange booth to exchange the yen that you miraculously have left over (Tokyo is expensive!) and notice the exchange rates have changed.
It's these changes in the exchanges rates that allow you to make money in the foreign exchange market.
The foreign exchange market , which is usually known as " forex (http://binaryoption.ae/index.php?board=14.0) " or " FX ," is the largest financial market in the world.
Compared to the "measly" $22.4 billion per day volume of the New York Stock Exchange (NYSE), the foreign exchange market looks absolutely ginormous with its $5 TRILLION a day trade volume.
That's trillion with a "t".
Let's take a moment to put this into perspective using monsters...
The largest stock market in the world, the New York Stock Exchange (NYSE) , trades a volume of about $22.4 billion each day. If we used a monster to represent the NYSE, it would look like this...
Looks intimidating. Some may even find it sexy.
You hear about the NYSE in the news every day... on CNBC... on Bloomberg...on BBC... heck, you even probably hear about it at your local gym. "The NYSE is up today, blah, blah".
When people talk about the "market", they usually mean the stock market. So the NYSE sounds big, it's loud and likes to make a lot of noise.
But if you actually compare it to the forex (http://binaryoption.ae/index.php?board=14.0) market , it would look like this...
Oooh, the NYSE looks so puny compared to the forex (http://binaryoption.ae/index.php?board=14.0) market! It doesn't stand a chance!
Check out the graph of the average daily trading volume for the forex (http://binaryoption.ae/index.php?board=14.0) market, New York Stock Exchange, Tokyo Stock Exchange, and London Stock Exchange:
The currency market is over 200 times BIGGER! It is HUGE! But hold your horses, there's a catch!
: Re: How to Make Money Trading forex
: admin 01, 2020, 06:35
That huge $5 trillion number covers the entire global foreign exchange market, BUT daily trading volume from retail traders (that's us) make up between 5-6% of overall volume, or between $300-400 billion.
So you see, the forex (http://binaryoption.ae/index.php?board=14.0) market is definitely huge, but not as huge as the others would like you to believe. We don't like to exaggerate. We just keepin' it real.
Aside from its size, the market also rarely closes!
The forex (http://binaryoption.ae/index.php?board=14.0) market is open 24 hours a day and 5 days a week , only closing down during the weekend. (What a bunch of slackers!)
So unlike the stock or bond markets, the forex (http://binaryoption.ae/index.php?board=14.0) market does NOT close at the end of each business day.
Instead, trading just shifts to different financial centers around the world.
The day starts when traders wake up in Sydney then moves to Tokyo, London, Frankfurt and finally, New York, before trading starts all over again in Sydney!
In the next section, we'll reveal WHAT exactly is traded in the forex (http://binaryoption.ae/index.php?board=14.0) market.
: Re: How to Make Money Trading forex
: admin 01, 2020, 06:35
imple. Looking for a breakdown of forex (http://binaryoption.ae/index.php?board=14.0) terminology? Head over to our glossary page.
What is the forex (http://binaryoption.ae/index.php?board=14.0) market?
What is forex (http://binaryoption.ae/index.php?board=14.0) trading?
What is a forex (http://binaryoption.ae/index.php?board=14.0) broker?
What is the forex (http://binaryoption.ae/index.php?board=14.0) market?
Foreign exchange (also known as forex (http://binaryoption.ae/index.php?board=14.0) or FX) refers to the global, over-the-counter market (OTC) where traders, investors, institutions and banks, exchange, speculate on, buy and sell world currencies.
Trading is conducted over the 'interbank market', an online channel through which currencies are traded 24 hours a day, five days a week. forex (http://binaryoption.ae/index.php?board=14.0) is one of the largest financial markets, with an estimated global daily turnover of more than US$5 trillion.
What is forex (http://binaryoption.ae/index.php?board=14.0) trading?
forex (http://binaryoption.ae/index.php?board=14.0) trading is the act of buying or selling currencies. Banks, central banks, corporations, institutional investors and individual traders exchange foreign currency for a variety of reasons, including balancing the markets, facilitating international trade and tourism, or making a profit.
Currency is traded in pairs, in both spot and futures markets. The value of a currency pair is driven by economic, political and environmental factors, such as wars, natural disasters, or national elections.
: Re: How to Make Money Trading forex
: admin 01, 2020, 06:35
What is a forex (http://binaryoption.ae/index.php?board=14.0) broker?
Brokers act as intermediaries, facilitating trades by providing clients access to the 24-hour interbank in order to conduct trades.
FXTM offers a number of different accounts, each providing services and features tailored to our clients' individual trading objectives. Discover the account that's right for you on our account page. New to forex (http://binaryoption.ae/index.php?board=14.0) trading? Learn about the markets by opening a demo account page.
Understanding Currency Pairs.
All transactions made on the forex (http://binaryoption.ae/index.php?board=14.0) market involve the simultaneous purchasing and selling of two currencies. These are called 'currency pairs', and include a base currency and a quote currency. The diagram below represents the forex (http://binaryoption.ae/index.php?board=14.0) pair EUR/USD (Euro/US Dollar), one of the most common currency pairs traded on the forex (http://binaryoption.ae/index.php?board=14.0) market.
Sell 1 Euro for 1.0916 US Dollars.
Buy 1 Euro for 1.0918 US Dollars.
Ask Price - Bid Price.
1.0918 - 1.0916 = 0.0002 (2 pips)
Ask Price - Bid Price.
1.0918 - 1.0916 = 0.0002 (2 pips)
Base Currency.
The base currency is the first currency that appears in a forex (http://binaryoption.ae/index.php?board=14.0) pair. This currency is bought or sold in exchange for the quote currency. So, based on the example above, it will cost a trader 1.0916 USD to buy 1 EUR . Alternatively, a trader could sell 1 EUR for 1.0916 USD.
Quote currencies.
The second currency of a currency pair is called the quote currency. In EUR/USD for example, USD is the quote currency.
Ask Price.
TThe ask price is the value at which a trader accepts to buy a currency .
Bid Price.
The bid price is the value at which a trader is prepared to sell a currency.
Spread.
A spread is the difference between the ask price and the bid price. In other words, it is the cost of trading. For example, if the Euro to US dollar is trading with an ask price of 1.0918 and a bid price of 1.0916, then the spread will be the ask price minus the bid price. In this case, 0.0002.
A point in price - or pip for short - is a measure of the change in a currency pair in the forex (http://binaryoption.ae/index.php?board=14.0) market. The acronym can also stand for 'percentage in point' and 'price interest point'. A pip is used to measure price movements, and it represents a change in a currency pair. Most currency pairs are quoted to five decimal places.
Note: forex (http://binaryoption.ae/index.php?board=14.0) prices are often quoted to four decimal places because their spread differences are typically very small. However, there is no definitive rule when it comes to the number of decimal places used for forex (http://binaryoption.ae/index.php?board=14.0) quotes.
On the forex (http://binaryoption.ae/index.php?board=14.0) market, trades in currencies are often worth millions, so small bid-ask price differences (i.e. several pips) can soon add up to a significant profit. Of course, such large trading volumes mean a small spread can also equate to significant losses. Always trade carefully and consider the risks involved.
Visualising Currency Trades.
: Re: How to Make Money Trading forex
: admin 01, 2020, 06:36
Trades & Key Terminology.
A 'position' is the term used to describe a trade in progress. A long position means a trader has bought a currency expecting its value to increase. Once the trader sells that currency back to the market (ideally for a higher price than he paid for it), his long position is said to be 'closed' and the trade is complete. A short position refers to a trader who sells a currency expecting its value to decrease, and plans to buy it back at a lower price. A short position is 'closed' once the trader buys back the asset (ideally for less than he sold it for).
For example, if the currency pair EUR/USD was trading at 1.0916/1.0918, then an investor looking to open a long position on the euro would purchase 1 EUR for 1.0918 USD. The trader will then hold on to the euro in the hopes that it will appreciate, selling it back to the market at a profit once its price has increased.
An investor going short on the EUR would sell 1 EUR for 1.0916 USD. This trader expects the euro to depreciate, and plans to buy it back at a lower rate if it does.
What are the most traded currency pairs on the forex (http://binaryoption.ae/index.php?board=14.0) market?
There are seven Major currency pairs on the forex (http://binaryoption.ae/index.php?board=14.0) market. Other brackets include Crosses and Exotic currency pairs, which are less commonly traded and all relatively illiquid (i.e., not easily exchanged for cash).
MAJOR CURRENCY PAIRS.
Major currency pairs are the most commonly traded, and account for nearly 80% of trade volume on the forex (http://binaryoption.ae/index.php?board=14.0) market. These currency pairs could typically have low volatility and high liquidity.
They are associated with stable, well managed economies, are less susceptible to manipulation and have smaller spreads than other pairs.
CROSSES.
Cross currency pairs - Crosses - are pairs that do not include the USD. Historically, Crosses were converted first into USD and then into the desired currency, but are now offered for direct exchange.
The most commonly traded are derived from Minor currency pairs (e.g. EUR/GBP, EUR/JPY, GBP/JPY); they are typically less liquid and more volatile than Major currency pairs.
EXOTIC CURRENCY PAIRS.
Exotics are currencies from emerging or smaller economies, paired with a Major.
Compared to Crosses and Majors, Exotics are much riskier to trade because they are less liquid, more volatile, and more susceptible to manipulation.
They also contain wider spreads, and are more sensitive to sudden shifts in political and financial developments.
We've created a table below which showcases several different currency pairs from each bracket, as well as some nicknames which were coined by traders themselves.
: Re: How to Make Money Trading forex
: admin 01, 2020, 06:36
: Re: How to Make Money Trading forex
: admin 01, 2020, 06:37
Popular Currency Pairs.
Abbreviations.
N. Zealand Dollar.
UNDERSTANDING forex (http://binaryoption.ae/index.php?board=14.0) CHARTS.
CANDLESTICK CHART.
A candlestick is a chart, also known as a Japanese Candlestick Chart, that is often favoured by traders due to the wide range of information it portrays. The chart displays the high, low, opening and closing prices.
A candlestick has three points: open, close and the wicks. The wicks show the high to low range and the 'real body' (wide section) shows investors if the closing price was higher or lower than the opening price.
If the candlestick is filled, then the currency pair closed lower than it opened. If the candlestick is hollow, then the closing price is higher than the opening price.
BAR CHART.
A bar chart shows the opening, close, high and low of the currency pair's prices.
The top of the bar represents the highest paid price and the bottom indicates the lowest traded price for that specific time period.
The actual bar represents the currency pair's overall trading range and the horizontal lines on the sides represent the opening (left) and the closing prices (right).
A bar chart is most commonly used to identify the contraction and expansion of price ranges.
LINE CHART.
A line chart is easy to understand for forex (http://binaryoption.ae/index.php?board=14.0) trading beginners. In a line chart, a line is drawn from one closing price to the next.
When connected, it is easy to identify a general price movement of a currency pair throughout a time period and determine currency patterns.
NEED TO KNOW MORE ABOUT TRADING forex (http://binaryoption.ae/index.php?board=14.0)?
How to start trading with a forex (http://binaryoption.ae/index.php?board=14.0) broker.
A broker such as FXTM acts an intermediary between the traders and the liquidity providers. It facilitates in the execution of clients' orders.
It is recommended to choose a licensed, regulated broker that has at least 5 years of proven experience. If your broker abides by regulatory rules, then you can be sure that they are legitimate.
Once you have an active account, you can trade -- but you will be required to make a deposit to cover the costs of your trades. This is called a margin account.
However, it's really important to remember that becoming a profitable trader isn't an overnight process. It takes time to become familiar with the markets, and there's a whole new vocabulary to learn. For this reason, reputable brokers like FXTM offer a Demo account. This is a great way to experiment with different trading strategies - but with virtual money and none of the risk!
Once you're ready to move on to live trading, we've got a great range of trading accounts to suit you.
: Re: How to Make Money Trading forex
: admin 01, 2020, 06:37
: Re: How to Make Money Trading forex
: admin 01, 2020, 06:38
Learn forex (http://binaryoption.ae/index.php?board=14.0) trading.
As a global broker, we're firm believers that developing a sound understanding of the markets is imperative to a trader's potential to succeed. That's why FXTM offer a vast range of industry-leading educational resources in a variety of languages which are tailored to the needs of both new and experienced traders.
These include free webinars, Ebooks, articles and more. Prefer to learn from an expert in person? We also hold insightful seminars and workshops in various regions around the world that a cover a multitude of topics.
There are also many forex (http://binaryoption.ae/index.php?board=14.0) tools available to traders such as margin calculators, pip calculators, profit calculators, economic trading calendars, trading signals and foreign exchange currency converters.
forex (http://binaryoption.ae/index.php?board=14.0) widgets can help to enhance your trading experience. Some of the more popular widgets include Live rates feed, Live Commodities Quotes, Live Indices Quotes, and market update widgets.
MT4 & MT5 Webtrader Platforms.
A forex (http://binaryoption.ae/index.php?board=14.0) trading platform is an online software which enables investors to access the foreign exchange market. It can be used to open, close and manage trades from the device of their choice and contains a variety of tools, indicators and timeframes designed to allow you to monitor and analyse the markets in real-time.
As a leading global broker, FXTM are committed to providing services tailored to the needs of our clients. As such, we're s proud to offer our traders the choice of two of the industry's leading forex (http://binaryoption.ae/index.php?board=14.0) trading platforms; MetaTrader 4 (MT4) and MetaTrader 5 (MT5). They are both available on a PC, Mac, mobile (iOS and Android) or tablet.
MetaTrader 4.
MetaTrader 4, also known as MT4, provides access to a range of markets and hundreds of different financial instruments, including foreign exchange, commodities, CFDs and indices.
It provides you with all the tools you need to both manage your trades and analyse the markets, whilst also being completely free to download.
With the MetaTrader 4 platform, you'll enjoy easy-to-read, interactive charts that allow you to monitor and analyse the markets in real-time. You'll also have access to more than 30 technical indicators which can help you to identify market trends and signals for entry and exit points.
: Re: How to Make Money Trading forex
: admin 01, 2020, 06:38
: Re: How to Make Money Trading forex
: admin 01, 2020, 06:38
MetaTrader 5.
MetaTrader 5, or MT5, is the newest and most advanced online and free trading platform. Trading on MT5 via FXTM gives you even greater access to financial markets including foreign exchange, commodities, CFDs, stocks, futures and indices.
Its diverse functionality, fundamental and technical analysis tools, copy trading and automated trading equip you with the best tools and instruments available.
Other great benefits of MT5 include a multi-threaded strategy tester, fund transfer between accounts and a system of alerts to keep up to date with all the latest market events. Traders can also communicate through the embedded MQL5 community chat to network with other traders and share tips and strategies.
These platforms, combined with innovative services such as FXTM's Pivot Point tool and FXTM Invest, as well an award-winning Customer Support team, ensures FXTM traders have all the resources they need to trade with confidence.
You can find out more about our trading platforms, or download MT4 and MT5 from our trading platforms page.
Still not trading with a world-leading broker? Sign up today.
: Re: How to Make Money Trading forex
: admin 01, 2020, 06:38
: Re: How to Make Money Trading forex
: admin 01, 2020, 06:39

How to Trade Fibonacci Retracements
: Re: How to Make Money Trading forex
: admin 01, 2020, 06:40
Can forex (http://binaryoption.ae/index.php?board=14.0) Trading Make You Rich?
Can forex (http://binaryoption.ae/index.php?board=14.0) trading make you rich? Although our instinctive reaction to that question would be an unequivocal "No," we should qualify that response. forex (http://binaryoption.ae/index.php?board=14.0) trading may make you rich if you are a hedge fund with deep pockets or an unusually skilled currency trader. But for the average retail trader, rather than being an easy road to riches, forex (http://binaryoption.ae/index.php?board=14.0) trading can be a rocky highway to enormous losses and potential penury.
But first, the stats. A Bloomberg article in Nov. 2014 noted that based on reports to their clients by two of the biggest forex (http://binaryoption.ae/index.php?board=14.0) companies at the time--Gain Capital Holdings Inc. (GCAP) and FXCM Inc.--68% of investors had net losses from trading currencies in the prior year. While this could be interpreted to mean that about one in three traders does not lose money trading currencies, that's not the same as getting rich trading forex (http://binaryoption.ae/index.php?board=14.0).
Key Takeaways.
Many retail traders turn to the forex (http://binaryoption.ae/index.php?board=14.0) market in search of fast profits. Statistics show that most aspiring forex (http://binaryoption.ae/index.php?board=14.0) traders fail, and some even lose large amounts of money. Leverage is a double-edged sword, as it can lead to outsized profits but also substantial losses. Counterparty risks, platform malfunctions, and sudden bursts of volatility also pose challenges to would-be forex (http://binaryoption.ae/index.php?board=14.0) traders. Unlike stocks and futures that trade on exchanges, forex (http://binaryoption.ae/index.php?board=14.0) pairs trade in the over-the-counter market with no central clearing firm.
Note that the Bloomberg numbers were cited just two months before an unexpected seismic shock in the currency markets highlighted the risks of forex (http://binaryoption.ae/index.php?board=14.0) trading. On Jan. 15, 2015, the Swiss National Bank abandoned the Swiss franc's cap of 1.20 against the euro that it had in place for three years. As a result, the Swiss franc soared as much as 41% against the euro and 38% versus the U.S. dollar on that day.
The surprise move from Switzerland's central bank inflicted losses running into the hundreds of millions of dollars on innumerable participants in forex (http://binaryoption.ae/index.php?board=14.0) trading, from small retail investors to large banks. Losses in retail trading accounts wiped out the capital of at least three brokerages, rendering them insolvent, and took FXCM, then the largest retail forex (http://binaryoption.ae/index.php?board=14.0) brokerage in the United States, to the verge of bankruptcy.
Unexpected one time events are not the only risk facing forex (http://binaryoption.ae/index.php?board=14.0) traders. Here are seven other reasons why the odds are stacked against the retail trader who wants to get rich trading the forex (http://binaryoption.ae/index.php?board=14.0) market.
: Re: How to Make Money Trading forex
: admin 01, 2020, 06:41
Excessive Leverage.
Although currencies can be volatile, violent gyrations like that of the aforementioned Swiss franc are not that common. For example, a substantial move that takes the euro from 1.20 to 1.10 versus the U.S. dollar over a week is still a change of less than 10%. Stocks, on the other hand, can easily trade up or down 20% or more in a single day. But the allure of forex (http://binaryoption.ae/index.php?board=14.0) trading lies in the huge leverage provided by forex (http://binaryoption.ae/index.php?board=14.0) brokerages, which can magnify gains (and losses).
A trader who shorts $5,000 worth of euros against the U.S. dollar at 1.20 and then covers the short position at 1.10 would make a tidy profit of $500 or 8.33%. If the trader used the maximum leverage of 50:1 permitted in the U.S. (ignoring trading costs and commissions) the profit is $25,000, or 416.67%.
Of course, had the trader been long euro at 1.20, used 50:1 leverage, and exited the trade at 1.10, the potential loss would have been $25,000. In some overseas jurisdictions, leverage can be as much as 200:1 or even higher. Because excessive leverage is the single biggest risk factor in retail forex (http://binaryoption.ae/index.php?board=14.0) trading, regulators in a number of nations are clamping down on it.
Asymmetric Risk to Reward.
Seasoned forex (http://binaryoption.ae/index.php?board=14.0) traders keep their losses small and offset these with sizable gains when their currency call proves to be correct. Most retail traders, however, do it the other way around, making small profits on a number of positions but then holding on to a losing trade for too long and incurring a substantial loss. This can also result in losing more than your initial investment.
Platform or System Malfunction.
Imagine your plight if you have a large position and are unable to close a trade because of a platform malfunction or system failure, which could be anything from a power outage to an Internet overload or computer crash. This category would also include exceptionally volatile times when orders such as stop-losses do not work. For instance, many traders had tight stop-losses in place on their short Swiss franc positions before the currency surged on Jan. 15, 2015. However, these proved ineffective because liquidity dried up even as everyone stampeded to close their short franc positions.
: Re: How to Make Money Trading forex
: admin 01, 2020, 06:42

How to Trade Moving Averages (Part 1)



How to Trade Moving Averages (Part 2)
: Re: How to Make Money Trading forex
: admin 01, 2020, 12:00
forex (http://binaryoption.ae/index.php?board=14.0) Trading: A Beginner's Guide.
forex (http://binaryoption.ae/index.php?board=14.0) is a portmanteau of foreign currency and exchange. Foreign exchange is the process of changing one currency into another currency for a variety of reasons, usually for commerce, trading, or tourism. According to a recent triennial report from the Bank for International Settlements (a global bank for national central banks), the average was more than $5.1 trillion in daily forex (http://binaryoption.ae/index.php?board=14.0) trading volume.  
Key Takeaways.
The foreign exchange (also known as FX or forex (http://binaryoption.ae/index.php?board=14.0)) market is a global marketplace for exchanging national currencies against one another. Because of the worldwide reach of trade, commerce, and finance, forex (http://binaryoption.ae/index.php?board=14.0) markets tend to be the largest and most liquid asset markets in the world. Currencies trade against each other as exchange rate pairs. For example, EUR/USD. forex (http://binaryoption.ae/index.php?board=14.0) markets exist as spot (cash) markets as well as derivatives markets offering forwards, futures, options, and currency swaps. Market participants use forex (http://binaryoption.ae/index.php?board=14.0) to hedge against international currency and interest rate risk, to speculate on geopolitical events, and to diversify portfolios, among several other reasons.
What Is the forex (http://binaryoption.ae/index.php?board=14.0) Market?
The foreign exchange market is where currencies are traded. Currencies are important to most people around the world, whether they realize it or not, because currencies need to be exchanged in order to conduct foreign trade and business. If you are living in the U.S. and want to buy cheese from France, either you or the company that you buy the cheese from has to pay the French for the cheese in euros (EUR). This means that the U.S. importer would have to exchange the equivalent value of U.S. dollars (USD) into euros. The same goes for traveling. A French tourist in Egypt can't pay in euros to see the pyramids because it's not the locally accepted currency. As such, the tourist has to exchange the euros for the local currency, in this case the Egyptian pound, at the current exchange rate.
One unique aspect of this international market is that there is no central marketplace for foreign exchange. Rather, currency trading is conducted electronically over-the-counter (OTC), which means that all transactions occur via computer networks between traders around the world, rather than on one centralized exchange. The market is open 24 hours a day, five and a half days a week, and currencies are traded worldwide in the major financial centers of London, New York, Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris and Sydney--across almost every time zone. This means that when the trading day in the U.S. ends, the forex (http://binaryoption.ae/index.php?board=14.0) market begins anew in Tokyo and Hong Kong. As such, the forex (http://binaryoption.ae/index.php?board=14.0) market can be extremely active any time of the day, with price quotes changing constantly.
: Re: How to Make Money Trading forex
: admin 01, 2020, 12:00
A Brief History of forex (http://binaryoption.ae/index.php?board=14.0).
Unlike stock markets, which can trace their roots back centuries, the forex (http://binaryoption.ae/index.php?board=14.0) market as we understand it today is a truly new market. Of course, in its most basic sense--that of people converting one currency to another for financial advantage--forex has been around since nations began minting currencies. But the modern forex (http://binaryoption.ae/index.php?board=14.0) markets are a modern invention. After the accord at Bretton Woods in 1971, more major currencies were allowed to float freely against one another. The values of individual currencies vary, which has given rise to the need for foreign exchange services and trading.
Commercial and investment banks conduct most of the trading in the forex (http://binaryoption.ae/index.php?board=14.0) markets on behalf of their clients, but there are also speculative opportunities for trading one currency against another for professional and individual investors.
Spot Market and the Forwards & Futures Markets.
There are actually three ways that institutions, corporations and individuals trade forex (http://binaryoption.ae/index.php?board=14.0): the spot market, the forwards market, and the futures market. forex (http://binaryoption.ae/index.php?board=14.0) trading in the spot market has always been the largest market because it is the "underlying" real asset that the forwards and futures markets are based on. In the past, the futures market was the most popular venue for traders because it was available to individual investors for a longer period of time. However, with the advent of electronic trading and numerous forex (http://binaryoption.ae/index.php?board=14.0) brokers, the spot market has witnessed a huge surge in activity and now surpasses the futures market as the preferred trading market for individual investors and speculators. When people refer to the forex (http://binaryoption.ae/index.php?board=14.0) market, they usually are referring to the spot market. The forwards and futures markets tend to be more popular with companies that need to hedge their foreign exchange risks out to a specific date in the future.
: Re: How to Make Money Trading forex
: admin 01, 2020, 12:00
More specifically, the spot market is where currencies are bought and sold according to the current price. That price, determined by supply and demand, is a reflection of many things, including current interest rates, economic performance, sentiment towards ongoing political situations (both locally and internationally), as well as the perception of the future performance of one currency against another. When a deal is finalized, this is known as a "spot deal." It is a bilateral transaction by which one party delivers an agreed-upon currency amount to the counter party and receives a specified amount of another currency at the agreed-upon exchange rate value. After a position is closed, the settlement is in cash. Although the spot market is commonly known as one that deals with transactions in the present (rather than the future), these trades actually take two days for settlement.
Unlike the spot market, the forwards and futures markets do not trade actual currencies. Instead they deal in contracts that represent claims to a certain currency type, a specific price per unit and a future date for settlement.
In the forwards market, contracts are bought and sold OTC between two parties, who determine the terms of the agreement between themselves.
In the futures market, futures contracts are bought and sold based upon a standard size and settlement date on public commodities markets, such as the Chicago Mercantile Exchange. In the U.S., the National Futures Association regulates the futures market. Futures contracts have specific details, including the number of units being traded, delivery and settlement dates, and minimum price increments that cannot be customized. The exchange acts as a counterpart to the trader, providing clearance and settlement.
Both types of contracts are binding and are typically settled for cash at the exchange in question upon expiry, although contracts can also be bought and sold before they expire. The forwards and futures markets can offer protection against risk when trading currencies. Usually, big international corporations use these markets in order to hedge against future exchange rate fluctuations, but speculators take part in these markets as well.
Note that you'll often see the terms: FX, forex (http://binaryoption.ae/index.php?board=14.0), foreign-exchange market, and currency market. These terms are synonymous and all refer to the forex (http://binaryoption.ae/index.php?board=14.0) market.
forex (http://binaryoption.ae/index.php?board=14.0) for Hedging.
Companies doing business in foreign countries are at risk due to fluctuations in currency values when they buy or sell goods and services outside of their domestic market. Foreign exchange markets provide a way to hedge currency risk by fixing a rate at which the transaction will be completed.
To accomplish this, a trader can buy or sell currencies in the forward or swap markets in advance, which locks in an exchange rate. For example, imagine that a company plans to sell U.S.-made blenders in Europe when the exchange rate between the euro and the dollar (EUR/USD) is €1 to $1 at parity.
: Re: How to Make Money Trading forex
: admin 01, 2020, 12:01
The blender costs $100 to manufacture, and the U.S. firm plans to sell it for €150--which is competitive with other blenders that were made in Europe. If this plan is successful, the company will make $50 in profit because the EUR/USD exchange rate is even. Unfortunately, the USD begins to rise in value versus the euro until the EUR/USD exchange rate is 0.80, which means it now costs $0.80 to buy €1.00.
The problem the company faces is that while it still costs $100 to make the blender, the company can only sell the product at the competitive price of €150, which when translated back into dollars is only $120 (€150 X 0.80 = $120). A stronger dollar resulted in a much smaller profit than expected.
The blender company could have reduced this risk by shorting the euro and buying the USD when they were at parity. That way, if the dollar rose in value, the profits from the trade would offset the reduced profit from the sale of blenders. If the USD fell in value, the more favorable exchange rate will increase the profit from the sale of blenders, which offsets the losses in the trade.
Hedging of this kind can be done in the currency futures market. The advantage for the trader is that futures contracts are standardized and cleared by a central authority. However, currency futures may be less liquid than the forward markets, which are decentralized and exist within the interbank system throughout the world.
forex (http://binaryoption.ae/index.php?board=14.0) for Speculation.
Factors like interest rates, trade flows, tourism, economic strength, and geopolitical risk affect supply and demand for currencies, which creates daily volatility in the forex (http://binaryoption.ae/index.php?board=14.0) markets. An opportunity exists to profit from changes that may increase or reduce one currency's value compared to another. A forecast that one currency will weaken is essentially the same as assuming that the other currency in the pair will strengthen because currencies are traded as pairs.
Imagine a trader who expects interest rates to rise in the U.S. compared to Australia while the exchange rate between the two currencies (AUD/USD) is 0.71 (it takes $0.71 USD to buy $1.00 AUD). The trader believes higher interest rates in the U.S. will increase demand for USD, and therefore the AUD/USD exchange rate will fall because it will require fewer, stronger USD to buy an AUD.
Assume that the trader is correct and interest rates rise, which decreases the AUD/USD exchange rate to 0.50. This means that it requires $0.50 USD to buy $1.00 AUD. If the investor had shorted the AUD and went long the USD, he or she would have profited from the change in value.
Currency as an Asset Class.
There are two distinct features to currencies as an asset class:
You can earn the interest rate differential between two currencies. You can profit from changes in the exchange rate.
An investor can profit from the difference between two interest rates in two different economies by buying the currency with the higher interest rate and shorting the currency with the lower interest rate. Prior to the 2008 financial crisis, it was very common to short the Japanese yen (JPY) and buy British pounds (GBP) because the interest rate differential was very large. This strategy is sometimes referred to as a "carry trade."
: Re: How to Make Money Trading forex
: admin 01, 2020, 12:01
Why We Can Trade Currencies.
Currency trading was very difficult for individual investors prior to the internet. Most currency traders were large multinational corporations, hedge funds or high-net-worth individuals because forex (http://binaryoption.ae/index.php?board=14.0) trading required a lot of capital. With help from the internet, a retail market aimed at individual traders has emerged, providing easy access to the foreign exchange markets, either through the banks themselves or brokers making a secondary market. Most online brokers or dealers offer very high leverage to individual traders who can control a large trade with a small account balance.
forex (http://binaryoption.ae/index.php?board=14.0) Trading: A Beginner's Guide.
forex (http://binaryoption.ae/index.php?board=14.0) Trading Risks.
Trading currencies can be risky and complex. The interbank market has varying degrees of regulation, and forex (http://binaryoption.ae/index.php?board=14.0) instruments are not standardized. In some parts of the world, forex (http://binaryoption.ae/index.php?board=14.0) trading is almost completely unregulated.
The interbank market is made up of banks trading with each other around the world. The banks themselves have to determine and accept sovereign risk and credit risk, and they have established internal processes to keep themselves as safe as possible. Regulations like this are industry-imposed for the protection of each participating bank.
Since the market is made by each of the participating banks providing offers and bids for a particular currency, the market pricing mechanism is based on supply and demand. Because there are such large trade flows within the system, it is difficult for rogue traders to influence the price of a currency. This system helps create transparency in the market for investors with access to interbank dealing.
Most small retail traders trade with relatively small and semi-unregulated forex (http://binaryoption.ae/index.php?board=14.0) brokers/dealers, which can (and sometimes do) re-quote prices and even trade against their own customers. Depending on where the dealer exists, there may be some government and industry regulation, but those safeguards are inconsistent around the globe.
Most retail investors should spend time investigating a forex (http://binaryoption.ae/index.php?board=14.0) dealer to find out whether it is regulated in the U.S. or the U.K. (dealers in the U.S. and U.K. have more oversight) or in a country with lax rules and oversight. It is also a good idea to find out what kind of account protections are available in case of a market crisis, or if a dealer becomes insolvent.
: Re: How to Make Money Trading forex
: admin 01, 2020, 12:01
Pros and Challenges of Trading forex (http://binaryoption.ae/index.php?board=14.0).
Pro : The forex (http://binaryoption.ae/index.php?board=14.0) markets are the largest in terms of daily trading volume in the world and therefore offer the most liquidity.   This makes it easy to enter and exit a position in any of the major currencies within a fraction of a second for a small spread in most market conditions.
Challenge : Banks, brokers, and dealers in the forex (http://binaryoption.ae/index.php?board=14.0) markets allow a high amount of leverage, which means that traders can control large positions with relatively little money of their own. Leverage in the range of 100:1 is a high ratio but not uncommon in forex (http://binaryoption.ae/index.php?board=14.0). A trader must understand the use of leverage and the risks that leverage introduces in an account. Extreme amounts of leverage have led to many dealers becoming insolvent unexpectedly.
Pro : The forex (http://binaryoption.ae/index.php?board=14.0) market is traded 24 hours a day, five days a week--starting each day in Australia and ending in New York. The major centers are Sydney, Hong Kong, Singapore, Tokyo, Frankfurt, Paris, London, and New York.
Challenge : Trading currencies productively requires an understanding of economic fundamentals and indicators. A currency trader needs to have a big-picture understanding of the economies of the various countries and their inter-connectedness to grasp the fundamentals that drive currency values.
The Bottom Line.
For traders--especially those with limited funds--day trading or swing trading in small amounts is easier in the forex (http://binaryoption.ae/index.php?board=14.0) market than other markets. For those with longer-term horizons and larger funds, long-term fundamentals-based trading or a carry trade can be profitable. A focus on understanding the macroeconomic fundamentals driving currency values and experience with technical analysis may help new forex (http://binaryoption.ae/index.php?board=14.0) traders to become more profitable.