There is a guide to Forex trading for every beginner to follow. It is the trading of foreign currencies. In this trade, there is a process of buying and selling the difference in currency. This activity occurs in the market (foreign exchange market). It is a transaction that is very easy to do because all you need is a computer and an internet network.
In trading, you can buy or sell a currency pair, or you can buy a derivative that predicts the movement of a specific currency pair through the best forex broker. Foreign currency exchange has occurred since prehistoric times. At that time there was an exchange of commodities from one country to another, such as gold for leather or spices for rice.
One of the most famous foreign exchange traders in the United States is Alex Brown & Sons, circa 1850. Broadly speaking, the evolution of the market is divided into 2 periods, starting with the fixed exchange rate period (gold standard period 1980-1914, world war period 1 1919-1939, and Bretton Woods period 1946-1971).
During this period, it did not attract much attention because its value was fixed by the government. After the Bretton Woods era (1971 to the present), all movements in foreign exchange rates were completely left to the market mechanism. With this system, the forex market develops into a market with the largest volume and is very active.
The First Guide to Forex Trading to Understand Its Currencies
The currency on the market is known by the “symbol” as the Rupiah is known as the IDR symbol. Usually these currencies are in pairs, meaning that there are 2 currency symbols from different countries being traded, where the value for one currency is relative to the currency pair.
For example, USD / JPY is a foreign currency pair in this example, writing like this means that 1 United States dollar (base currency) can be exchanged for 105.6 Japanese yen. Most traders focus on the difference in value on the following 7 foreign currency pairs EUR / USD, USD / JPY, GBP / USD, USD / CHF, USD / CAD, AUD / USD, NZD / USD.
This guide to forex trading makes it easier for foreign exchange traders who only need to pay attention to macroeconomic conditions in the 8 countries, the United States, Australia, Europe, Japan, England, Canada, New Zealand, and Switzerland.
The Advantages and Disadvantages
Understand more of the advantage and disadvantage it is an important guide to forex trading. One of the advantages that has been discussed is the factor of volatility, volume to the globalization of the market. Apart from these advantages, the market also offers low margins and high leverage. Commissions given to brokers also tend to be lower than stock brokers.
One of the downsides of the forex market is that high income can turn into huge losses quickly. This is because the large number of players and the amount of money being traded on the forex market can make players respond quickly to all information on the market so that there will be significant movements in currency values.
One thing we need to remember and underline; it’s a type of trading with high leverage (high leverage). It is classified as a derivative product, which is sophisticated (sophisticated). This leverage allows us to trade bigger money with less capital. However, this leverage has 2 sides; big profits of big losses. You can learn more about this in Didimax forex broker.
Before you decide to trade, make sure you first learn how to trade, read books, take seminars and try with little leverage. If you are already trading forex in the right way, it is hoped that profits will follow. Getting to know a guide to forex trading will help you to take the perfect strategy to gain profits.
