The term Forex in general, the currency market is understood to volumenträchtigste market by far in the world. Every trading day will be here on average nearly 4 trillion implemented daily. Until recent years, this huge market was reserved to institutional investors, which, however, has in the course of the spread of the forex trading fundamentally changed. Forex trading is not a conventional trade on the exchange, but called off-exchange currency market in the interbank market, even if the forex market has been part of most exchanges a few years ago.
A number of brokers who specialize in trading with forex trading products, offer private investors the opportunity to actively participate in the development of foreign exchange markets. For a special trading Forex trading software is required, which the respective brokers usually provided free of charge. And that this possibility precisely the concern of many private investors corresponds to the rapid growth rates of the past are impressive. However, at this point, an indication of the risk is appropriate, which is associated with the trading of currency positions. Unlike conventional investments such as stocks, the investor needs a FX Trade not bring the entire amount in a trade, but only a small percentage, is called the margin. Depending on the broker moves the level of margin for currency trades between 0.25% and 3%, resulting in a lift between 33 (3%) and 400 (0.25%) results. Investors want the long example with $ 100,000 to go (buy), it does not afford the $ 100,000, but only $ 1,000 if the margin is 1%, for example. Investors participate in the development of 1:1 contrast. Evaluates the U.S. dollar against the euro, for example, by 1%, the gain is $ 1,000, or 100%. Evaluates the U.S. dollar on the other hand decreased by 1%, the investor loses his effort. The example shows how risky the trade FX contracts can be. For precisely this reason, investors should start their career first extensive theoretical knowledge of the forex markets to acquire general and on technical analysis and / or open first a demo account before he or she starts with the real trading of FX contracts with a FX broker .
On Forex trading can thus participate basically anyone, even if these are usually large companies, foreign exchange brokers and dealers and banks. For private participation is possible through special forex brokers and day traders, where telephone orders can be placed above all, but also about forex software that is offered by various online forex brokers and can be downloaded. The online Forex trading offers a great advantage over phone traders: Forex Trading is actually possible only on weekdays - when online forex trading but this is consistently possible.
In the forex trading are certain basic conditions: So always be only with currency pairs traded in the market, for example EURUSD traded with the current course information (http://boersenradar.t-online.de) up to the fourth decimal place, and it is on margin. This means that you Strongly in forex trading on the name EURUSD 1.4456 means that one euro bought 1.4456 U.S. dollars to be paid - because the profit is not usually achieved only with large price differences, but even with small price fluctuations, foreign exchange will in Forex trading only bought in the form of a margin.
Although we had already an example, because of the complexity, but again to a brief statement. If you want to buy such as a currency for 10,000 euros, with most brokers have only 1% of this amount, or 100 euros, can be stored - the price goes up to the investor to increase this margin, the price of such decreases and this in a possible fall below the amount deposited, for example, if the price should fall by more than 1%, there is a so-called funding obligation. This means that either back is money "nachgeschossen" to keep his 10,000 Euro investment or it is automatically sold and invested capital is gone, even if the course should attract strong and shortly afterwards we were in the black.
Starting from this base, there are 4 basic transactions in the Forex market: The forex spot market, forward exchange contract and the ensuing swap and option contracts. Similar to the stock trading. The Forex trading is based on the above statement, as well as the trade settled in shares and other securities of speculative, as market movements and changes in forex in different directions can not be guaranteed - in contrast to a conventional system with a fixed interest rate may in Forex trading both threaten a total loss of the invested capital, as well as waving huge profits in a short time.
The profit as well as the loss can be limited in any case - for both the equities business is also in Forex trading, whether online forex broker or telephone broker, limits the possibility of stop loss and sell limits on price increases for certain, in which an automatic to be held for sale. But also protect those limits depending. Not necessarily in front of a total loss of the capital, but only protect against a nachschießen of capital from other accounts.
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