How uzsiimant forex prekyba can Benefit and Make Your Career in Forex Trading
Forex or Foreign Exchange is a currency exchange trading market all over the globe. Fore is known to determine the rates of currency exchange. You must have seen the prices of currency going up and down as compared to the global currency. If you frequently travel overseas, it is important for you to know what a Forex Trading is and how does it work. Forex exchange of currencies lets you understand the rate between the two currencies depending on the demand and supply which keeps on fluctuating continuously. Also, the forex trading market is the largest liquid financial market all over the globe. The specialty of the forex market is that the marker is open 24*5 which operates from different parts of the world and exchange of currencies takes place electronically. It is present in the financial regions of London
, Zurich, Tokyo, New York, Hong Kong, Singapore, Paris, and Sydney which covers almost all times zones of the world. The trading of the currency never stops as when one country stops working the other country starts according to the time zone.
How to start Forex Trading?
So, now you know Forex is the Foreign Exchange of currencies and its trading. To start Forex trading, first of all, you should understand the basics of Forex indicator
. The below steps which guide you through the basics in forex trading which you should follow to avoid loss.
1. Understanding different terminologies in Forex Trading
Like all the other trading business which has its terminologies, Forex also works on its basic terminologies. The basic terminologies which are used in Forex Trading are:
• Base Currency – The base currency you are using for the trade
• Quote Currency – The currency purchased by you is referred to as Quote Currency
• Exchange Rate – Ratio of the Quote Currency and Base Currency
• Long Position – It is buying base currency and selling quote currency
• Short Position – It is opposite to long position i.e. you want to buy quote currency and sell the base currency
• Bid Price – The price in which your broker is willing to buy your base currency in exchange for your quote currency
• Ask Price – When your broker wants to buy your quote currency in exchange of base currency
• Spread - Difference between the bid price and ask price.
So, if you understand these terminologies of Forex Trading you are all set to start your own.
2. Reading the Forex Quote
When you buy currency in forex it is referred to as Quote Currency. When buying a currency, you should look at the readings of the forex quote. When reading, you should look at the bid price which is on your left and ask price which is on your right.
3. Making approximate decisions on what currency you want to sell and what you want to buy
While buying or selling forex currencies you should make decisions which should land in favor of you. You must have to look at the economic conditions of the currency and predict it accordingly. Before making any predictions and approximations you must have a look at the country’s trading position that considers factors like the demand of goods and services of the country of which you are trying to buy or sell currencies. Apart from this, you should also keep an eye on the political conditions and GDP reports of the country.
4. Calculating Profits
The Forex profit or loss is measured in pips. The rate of calculation is one pip is equal to 0.0001 change in the value of the currency which you are predicting to buy or sell. By multiplying the change in the rate of currencies to the pips it will tell you the increment or decrement in the value of your account.
Advantages and Disadvantages of Forex Trading
With every pro, there always comes cons. If there is a benefit in Forex trading it has some losses too. Now, as you know how to start forex trading, let us look at pro and cons of the Forex Trading.
Pros of Forex Trading
With Forex trading, the trading has become some easier as compared to before because there is no centralized network looking after it. It is done solely by an electronic medium with your computer networks.
1. Trading in various Styles
Having the flexibility to trade from anywhere in the world, Forex trading has various styles of trading. Firstly, it runs 24 hours for a 5 and a half week, secondly, it never goes off because of which traders can make trades during off-hours also. Forex trading is very accommodating as traders can make long-term positions which continues from the start date of trade to several weeks.
2. No Commission and Low Costs
When trading through Forex it can have very low costs. There is almost nil commission when the brokers' trade through Forex as the profit which is made by them is from the forex currencies and the spreads.
3. No Involvement of any Central Entity
One of the best things about Forex is there is no centralized system to look after the currency exchange. It works solely on the buying and selling trades over the internet. Because of this, you will not lose your money or currency to any insider known or unknown broker. It will be you who will be responsible for any profit and loss of buying and selling currency. This could be one of the reasons why you should look for uzsiimant forex prekyba.
4. High Volume of Liquidity
The forex market has a huge number of traders which eventually results in a large volume of currency trades. In Forex trading, one need not worry about the stability of the currency prices in opening or closing hours.
As it is said earlier, with every benefit, there come cons. Let us look at the cons of Forex Trading.
Cons of Forex Trading
1. High Risk
Trading is a business of profits and losses. One can make face enormous profit at a time, while there can be losses too. If you have just started the Forex trading and you have less knowledge of trading, it is better to bid for small prices as not having proper knowledge can lead you to the loss in trading.
2. Self-learning and Understandings
Trading requires a skill which is learned from various trading portfolios. Unlike other trading markets, Forex is a self-learning market. You need to be focused every time as what is happening in the trade market and how it can profit you. Just a little of carelessness can bring you a huge loss.
3. Prediction of prices is complex
Forex currency prices depend on various factors of the country such as economic rate, political conditions, etc. The prices fluctuate up and down frequently, which can sometimes lead to the improper prediction of prices and calculating profit becomes complex.
So, above are advantages of Forex with some cons. When uzsiimant forex prekyba
, following above points and descriptions can help you in deciding and predicting the forex currency exchange rates.