Many people want to start working on the Forex market, but most people can hardly imagine how to arrange transactions on the Forex market. For those who already have started working on the Forex market, it is not a difficult question, but it can be a very difficult task for those who only plan to start working on the Forex market.
First, let’s try to determine the structure of the Forex market. As all markets, the Forex market is the sum total of sellers and buyers of currency. They are named operators of the Forex market. These are big banks in different countries including central banks, big investments companies, pension funds (majority of he funds are North American) The operators trade different currencies making transactions. The minimal size (contract, lot) of a transaction is about one million of US dollars. The operators are connected by a specific net that allows to post transactions immediately. The essential point is that there is no physical movement of money, i.e. if a bank in Japan buys a billion of British pounds for yens in a bank in London, there is no need to load the money to a plane and to deliver the money to Japan under escort. Really, why? As the bank in Japan will sell the pounds to a bank in Germany for euros in a day (or even in a few minutes), and the German bank will sell the money to a London’s bank for yens. You shouldn’t look for a special sense in these transactions, this is the task of the operators of the market/ he most important for us is that a small investor can not get access to that market in any way. So, how does a small investor get access to the market?
A small investor gets access to the market with the help of brokers. Why do banks trade? They trade either by orders of their clients or they speculate. For last 15-20 years a lot of broker companies or brokers have appeared, that from one side are clients of Forex operators (banks) and from the other side they give opportunities to small investors to make transactions by buying and selling currencies on the Forex market, and they allow small investors to operate with small lots (in ten and hundreds thousands of US dollars)
Now it is clear that you need a broker company to get access to the Forex market. You sign a treaty with a broker company on which you get access to make transactions on the Forex market.
What to you need to sigh a treaty with a broker? What do you get from the broker? Of course you understand that you have to invest money if you want to get profit. And the trade on the Forex market is the way (or method) of investments in order to get profit. The more you invest the more you get. So, you have to open an account or in a bank or in the broker company to sigh a treaty with the broker.
There are 2 ways you can make money on Forex market.
OR you can hire professional traders to manage the money on your trading account and they will trade for you. Read more about forex investment.