What Is Forex Trading? For Starters, we Summarize in 12 Items

 What Is Forex Trading? For Starters, we Summarize in 12 Items
Okunuyor What Is Forex Trading? For Starters, we Summarize in 12 Items

Exactly “What Does Forex Mean?”

In short, it means currency trading. Because it represents the transactions that take place according to the value of the currencies of the countries against each other.

This general definition may not be enough for you. But we advise you to think simply like this::

When you go to a foreign country, you convert the USD you have into the money of that country. When making this transaction, you give the USD you have to the exchange office and receive the foreign currency in return.

So suppose you are going to convert your money into Euros. You will receive approximately 113 euros (1 Euro = 8.84 USD) against the 1000 USD you have. We all already know this transformation.

Forex is the market where investments are made on these conversions. It is the largest market in the world with a daily trading volume of around 7 trillion dollars.

Just as you think about making a profit by converting your savings into dollars on the mobility of currencies, you do the same in forex. You may simply think that you are performing your transactions at the exchange office in a more professional manner.

In addition to hundreds of currency pairs, gold, silver, corn and shares of companies such as Apple and Facebook are also the subject of forex trading. The market makes it possible for you to invest with these instruments in non-physical ways, taking advantage of the price difference.

What Is Forex Trading For Starters, we Summarize in 12 Items

What Is Forex Trading For Starters, we Summarize in 12 Items

What Is the Forex Market Like?

The largest stock exchange in the world is the New York Stock Exchange. It has a daily transaction volume of around $ 20 billion.

Forex, on the other hand, hosts a daily trading volume of close to $ 7 trillion. This is a huge difference compared to the NYSE. This feature causes us to recognize it as the largest financial market in the world.

The market has a decentralized structure. In other words, we would not say that forex is managed from the USA. It works through financial centers located all over the world.

The global structure of the market allows it to remain open 24 hours a day, 5 days a week, excluding weekends. In this way, you can make uninterrupted transactions from the night connecting Sunday to Monday to the night connecting Friday to Saturday.

Staying connected to the foreign exchange market 24/5 allows you to invest while US trading hours are open. So you can wake up at 3 in the night, turn on your computer and buy and sell dollars.

You can open your computer or smartphone in Forex and trade anytime, anywhere. You can easily make all your transactions through the platform where you manage your investments.

The market structure, which is absent in the stock exchange, has both great advantages and significant disadvantages. With its large structure, you can make your transactions in seconds and get daily earnings. However, this causes you to take more careful actions.

You can make a two-way transaction, evaluate falling prices. Moreover, you do this by simply placing a sales order.

It is a market where leveraged transactions can also be made. Leverage, which is limited to a ratio of 1 to 10 in our country, makes it easier to increase your earnings. However, it is a feature that must be used correctly. If you don’t know how to use the feature, you will increase the loss you will experience.

With its global structure, the variety of investment instruments in forex is also high. You trade with hundreds of different currency pairs. In addition to these; you can easily add instruments such as precious metals, industrial metals, stocks, agricultural products and stock October indices to your portfolio.

In Forex, you trade with instruments in non-physical ways. In this way, you can create instant positions in agricultural products such as cocoa, cotton. In the same way, you can easily buy and sell Apple shares.

Does Forex Make Money?

Another curious question is whether money is made in forex. As in any market, there are risks in forex. And as long as you can manage them, you make money.

Due to its market structure, it offers a faster profit than the stock market. You can achieve strong profits in the short term. However, this situation also requires you to be more careful. Therefore, it would not be wrong to say that you make money as long as you can keep up with the rhythm of the market.

The market offers short-term returns due to the high daily trading volume, the ability to buy and sell quickly, the ability to open bidirectional positions and the leverage effect. You, as a knowledgeable and experienced investor, will have these returns.

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