What is Forex Trading?
Lately, Forex trading has become quite a popular topic; in no other area of business can you get such a large profit in a short period of time.
Most novice traders are attracted by the opportunity to work without leaving home and the availability of training materials.
Trading forex is speculative trading on a currency exchange, through a special trading platform, to make a profit on the difference in exchange rates.
To earn money, you do not need a large amount of funds; an increase in transaction volumes occurs through the use of broker leverage.
The essence of making a profit
Profit on Forex is obtained due to constant changes in exchange rates, if, for example, you purchased 10,000 euros by paying 12,000 US dollars for them, and after a few minutes the rate rose by 50 points, you can already sell the euro for 12,050 dollars, earning $50 in just a few minutes.
Unfortunately, not everyone has a fairly large amount of money available, but to solve this problem, brokers provide a special, interest-free loan called leverage.
Benefits of Forex Trading
The main advantage of this type of earnings is the provision of leverage, which allows you to increase your initial capital by tens, and if desired, hundreds of times.
It is this feature that is one of the secrets of trading , which makes it possible to make extra profits.
Credit funds are provided in proportion to the trader’s main deposit, increasing it by a certain number of times.
For example, a leverage of 1:100 makes it possible to increase your available funds exactly 100 times. That is, with only $1,000 at your disposal, trades of 100,000 are available to you. You can independently choose the leverage size from 1:1 to 1:1000, depending on the Forex strategy .
The presence of a trading platform allows you to partially automate the process of exchange trading by setting pending orders, and minimizing risks by setting stop losses.
In addition, one cannot fail to note other advantages - the absence of the need to have special education, a flexible work schedule and the opportunity to work without leaving home.
What do you need to get started?
Equipment – no special equipment is required for Forex trading, just install a trader terminal and you are ready to trade on the stock exchange. The program is quite simple and has an intuitive interface.
Intermediaries - it is clear that all trading is carried out through special intermediaries - dealing centers a spread commission for this .
Training is the most painful place for any beginner; you can make money on Forex purely by luck, but such transactions are random in nature, and winning can always be replaced by failure.
You can understand the essence of trading in just a few days, but becoming a pro is much more difficult; it can take a year or more, depending on the amount of time the trader spends on textbooks and the trading terminal.
Forex trading is an excellent opportunity to start earning money on your own, without depending on an employer or changes in laws, while the minimum amount for forex trading can be only a few dollars.