The international currency trading is the largest and most mobile market in the world. This market, which is still growing rapidly, offers some interesting advantages over trading in its shares and has a growing number of individuals able to achieve.


Forex Explained

The international currency trading is better known under the term forex, short for foreign exchange market. Another more common name is FX. The number of traders operating in this market is enormous, not only banks and financial institutions trading foreign currencies, companies, currency speculators, governments and individuals. Especially the latter is growing thanks to the current capabilities of the Internet. Basically, the market compared to trading stocks, but there are some differences to identify:


24 hour market

Compared to the equity market, the forex a great advantage, almost the entire trading week, 24 hours a day. The only exception to this is the weekend from 23:00 on Friday until 9:15 p.m. on Sunday (standard or winter). All other times of the week will continue to trade. With shares trading each day in the morning and started the afternoon closed.


levers

Another point on which currency trading is fundamentally different from stock trading forex is the extent to which use of levers, or leverage. This means that for a certain amount loaded bought more. With a leverage of 1 / 100 for example, buy a volume of 10,000, against a deposit of 100 euros. This is also quite possible the currency market because the volatility of the market is strong, but margins are relatively small. This means that there is with slight variations, for a small deposit, even a relatively large gains can be achieved. The software that can be traded on the forex market makes it virtually always for itself in the event that the value loss of yet more likely to sustain than the actual deposit is large, the program automatically sells the position. This means that the loss can never be greater than the deposited amount, as protection against possible liabilities. However, there are other ways to set an automatic limit, which will be discussed later


Terminology

Trading in currency requires a knowledge of some basic concepts and terms. These terms are also available for forex trading software used, which also often available in Dutch.


Currency pair

The currency pair is the combination of currency that is traded. It is indeed a certain currency with another currency to buy. The combination can thus be EUR / USD, taking so euro traded against U.S. dollars. There are so many different combinations which one can act.


Pip

A pip is the "percentage in point", which should be seen as the smallest change possible within a value. Example, if we have a currency pair with the value 112.97, then an increase to 112.98 an increase of 1 pip. Most values are spelled in four decimal places, which is an increase of 1.3536 to 1.3537 example also has an increase of 1 pip.


Spread

The spread is a term often occurs in the forex market. The spread is simply the difference between the price at which one can buy and the price at which one can sell. In other words, this is the difference between bidkoers and askkoers.


Limits

As with the stock trading is also trading currencies possible to set limits. This allows for example to allow an automatic sold when the value is lower than a certain amount, or even if the value exceeds a specified amount. The big advantage of course is that it is not necessary to constantly look at the screen, but the order is fully automated.


Opportunities for individuals

For individuals, it is also possible to respond to small changes in the value of the currencies. There are several programs available on the Internet that show the rates and many possible currency pairs available. In these programs can be paid a small sum to start the action, but it is almost always possible to first start with a notional amount, where one can trade with fake money so the actual prices, so the act to get the fingers. When trading currencies is good once, it can often be quickly switched to trading with real money.


Bonuses

Most programs that are available for trading currencies offer great bonuses if they are going to use that program trading. This in itself is of course no wonder, because there are always costs associated with using such a program, so the more people use it, the more these companies deserve. The cost of these programs are often very small, but this is a program to see the conditions. With these bonuses, it is also good to realize that this is often first to be used several times in action, before they can be absorbed. This is of course logical, otherwise one example, 20 million earn from $ 100 to collapse in such a program and complete 120 euro (20 euro bonus), then immediately return.