If to tell what is Forex by simple words imagine that today you have bought 100ˆ, and a month later you have decided to exchange them for another currency again. If for this month Euro has grown in the price you are waited by a small bonus or that traders name profit. So, with these simple words it is possible to describe a principle of work of the market Forex.
As you understand, the exchange rate all time changes. It depends on many factors: an economic and political situation, interventions of banks, a currency demand in the world market. An exchange rate, as well as any other price, this consequence of such factors as supply and demand. The above demand, the accordingly above the price.
Banks constantly buy and sell currency, they excellently earn on it. Earlier only banks and large broker houses could earn on rate fluctuations of currencies, this kind of business was inaccessible to private investors. It was necessary to have millions to get access on Forex. Forex as that, began to exist since 1971 after the decision on introduction of floating rates of the currencies was accepted, before all currencies have been adhered either to gold, or to dollar.
What has changed? Why now Forex became accessible almost to everyone? Development of information technology became a principal cause of changes. Earlier for quotation reception it was necessary to call in bank, and now quotations are broadcast online and are accessible to everyone at whom there is an Internet. The basic difference of the market Forex from other financial markets is that Forex doesn’t have concrete location, it exists in an interbank network, therefore works round the clock.
Secondly, there was such concept, as a credit shoulder. Many are guarded with a word “credit”, they think that here there is any deceit. What for to the broker free of charge to grant the loan? The broker really grants the loan, but actual delivery of money isn’t carried out! You can’t draw out this money or spend, they can use only for opening of transactions. Besides, at transaction opening, the broker freezes on yours to the account the certain sum, a so-called mortgaging margin, thereby insuring itself against all losses. The credit shoulder can be a miscellaneous, but the most widespread is 1:100 that means, you can operate means in 100 times exceeding your deposit.
Thirdly, the more players in the market, the it ликвиднее, and the easier on it to earn. The market Forex the most liquid financial market in the world, here never arises a situation that you can’t close the transaction because there is no enough of buyers. Forex easily enough gives in to the technical analysis, therefore it is absolutely unessential to understand economy to trade in the market Forex.
For convenience of traders special programs – trading terminals where trade is carried out only by means of several buttons have been created. To test as the trader, it is not necessary special efforts, it is enough to have only access to the Internet, to download the terminal and it is possible to start to trade. Certainly, you soon will understand that special knowledge and work strategy, but, at least, are necessary you absolutely free of charge can check up – the given kind of activity is pleasant to you or not.
There are 2 ways you can make money on Forex.
Alternatively, you can hire experienced traders to manage your account and they will trade for you. Read more about forex investment.