In the forex market, we buy or sell currencies, with the intention to earn money (profit/profit) from price changes. From this point of view, the activity of trading forex is actually similar to that of the financial markets in General, such as stocks. Therefore, if you have experience in stock, should you will not encounter difficulty in trading forex. Although, you can also keep trading although no experience at all in other investments.
However, there are a number of notable differences between transactions on the forex market with the stock market or any other market. First and foremost is the perpetrator, forex trading can benefit both when prices rise or when prices fall. In contrast to stocks where we could profit if the price rises instead.
Why can it be so?
This is because in forex, currency trading is done in pairs. See the following image and description below:
For example, when we do our ' buy ' the pair EUR/USD, means we are buying the Euro currency by selling Dollars at the same time. In this regard, we expect the Euro will strengthen so much higher in the future than it is now. And if hope it actually materializes, then price graph EUR/USD is going to move up, and we can get the money from forex trading.
On the contrary, when we do ' sell ' the pair EUR/USD, which means that we sell the Euro currency by buying Dollars at the same time. It did when we expect the US dollar to the Euro compared to the more strengthened in the future. If that's the case, then price graph EUR/USD is going to move down, and we can still get money from forex trading when the Euro exchange rate decreased.
A Number Of Important Concepts In Forex Transactions
From the discussion above, certainly You could have concluded a number of basic concepts in forex. Well, in this section we will expose further.
Currency Pairs
The writing pair/pair forex is always written in pairs, such as EUR/USD, GBP/USD or USD/JPY. Why, in any foreign currency transaction we are simultaneously buying one currency and selling another.
In one couple, the first currency listed on the left of the slash ("/") is known as the base currency (Base Currency). While the second currency is called the right of the counter currency (Counter Currency).
Buy/Sell In Forex Trading
In forex trading are the most common terms used are:
Buy (Buy or Long): If you think the value of the base currency is going up.
Jual (Sell or Short): If you think the value of the base currency will go down.
Rate/Exchange Rates/Prices
Prices in forex trading are formed in the market that its international scale. The prices that will be visible on the given brokers trading software for us to use as a trader, in the form of graphs. For example as below:
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| How To Get Money From Forex Trading |
Why is that? Because of the difference in price between the two it would be a boon for a broker or agency be Your intermediary with the market. This can be represented as a foreign exchange selling and buying rate if you make a foreign currency exchange in the Money Changer.
The Price Difference Of Supply And Demand (Spread)
The bid (Bid) is the price at which you as a trader will sell (sell) the base currency.
Ask (Ask) is the price at which you as a trader will buy (buy) the base currency.
The bid price is always lower than the demand, and the difference is often called by the name of Spread.
Close/Close Transactions
After you open a position on one currency pair, later you will also need to close a position to realize a profit. Well in forex it is popularly called by Close.
So:
If You Buy the original, to close means CLOSE (Sell).
If you Sell the original, to close means CLOSE (Buy).
Next, look under concrete examples about how to earn money from forex trading.
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