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The foreign-exchange ("forex" or "FX") market is the place where currencies are traded. |
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Laste Edited: 2010-05-28 03:52:02 Forex Meaning :
The foreign-exchange ("forex" or "FX") market is the place
where currencies are traded. The forex market is the largest, most liquid market
in the world with an average traded value that exceeds $1.9 trillion per day.
There is no central marketplace for currency exchange,
rather, trade is conducted over-the-counter. The forex market is open 24 hours a
day, five days a week, with currencies being traded worldwide among the major
financial centers of London, New York, Tokyo, Zurich, Frankfurt, Hong Kong,
Singapore, Paris and Sydney - spanning most time zones.
Stock Exchange Market
The stock market and shares trading and securities has been
known for a long time, it is a place where short-and long-term speculation
investors meet to achieve high earnings according to their expectations, where
buying & selling stocks takes place.
Stock exchange markets & capital markets are considered the
largest & most active commercial markets in all the world, where companies are
offering their stocks for population to start buying & speculation.
There are different types of stock exchange markets for
examples there are markets for company shares, international currencies, gold,
silver, oil, & others, & the best is the foreign currency exchange market or
Forex.
Margin System
The margin trading system is not known to many people and is
thought to be for the rich only! although it has long been widespread in all
countries in the world, but unfortunately known for the few who were able to
make millions!! may be due to ignorance of the youth to the sock exchange
secrets because of the lack of teaching aids to disseminate this science for
young people.
Many believe that stock exchange markets are limited for
large business men only, which is not true as any very ordinary person even with
a low income can invade that world who can start with as low as 1$, this is
true, you can start Forex trading in some companies with only 1$, you may also
pay 5$, 10$, 50$, 0r 100$ according to your abilities & money budget, but it's
most preferred to start with 2000$ to be able to feel the large profits.
There ate intermediate companies that accept a minimum
deposit such as $ 5 Marketiva for financial intermediation in Forex, for more
information, click here.
The majority of international stock exchange markets use the
margin system in their trading, by which, any ordinary person with low income
can trade with doubles of his capital.
The margin is the amount of equity that must be maintained
in a trading account to keep a position open. It acts as a good faith deposit by
the trader to ensure against trading losses. A margin account allows customers
to open positions with higher value than the amount of funds they have deposited
in their account.
The equity in excess of the margin requirement in a trading
account acts as a cushion for the trader. If the trader loses on a position to
the point that equity is below the minimum margin requirement, meaning the
cushion has completely worn out, then a margin call will result. Generally, in
online forex trading, the trader must deposit more funds before the margin call
or the position will be closed. Since no calls are issued before the
liquidation, the margin call is better known as margin out in this case. The
account will be margined out, meaning all the positions will be closed, once the
equity falls below the margin requirement.
An Example for a Forex Order
Trading system is applied on currency pairs, so you sell or
buy a currency for another one, suppose you want to start by buying the Euro US
Dollar pair which is shown on this format EUR \ USD, where the Euro is the base
currency & the Dollar is the currency used to buy the Euro, How come ??
Suppose you have a capital of 10,000$ of which you will use
10% to start trading (we always advise not to exceed this percentage of your
capital), this means you will spend 1000$ from your money as a margin which is
the insurance fund according to which the intermediate company will give you
100,000$ for trading as the margin rate is always 100:1.
This is what we call the margin system, & thereby you
will benefit from every movement of the market, if you would buy while the price
was 1.9000 then it raised to 1.9100, this means that you earned 100 points
(a point = 1% of your capital used in a separate position) so here one point =
10$, this means that you earned 1000$ which will be added to your account with
no delay whenever you close that position, you can make that profit in seconds &
this is for buying which is the same for selling as in Forex you can do both
buying & selling.
Why to trade in Stock Exchange markets specially Forex ??
This new modern way for business has widely spread allover
the world in the last years & became the most favorable with high liquidity
market in the world, if you mastered this work you can provide yourself a
constant significant income for you & your family.
The core of the Forex trading is that you buy a currency at
a low price and then sell it at a higher price when prices are rise and thus you
had made a profit, and vice versa, this is the essence of the work in the Forex.
You can achieve a very high earning during the minutes you
spent during an opened deal, indicators & statistical & news now confirm the
appearance of internet millionaires who started with a very insignificant
capital amount & in a very short period of time.
On the other side you should take care & be very careful as
the Forex also includes losses, we can say that this trade is an opportunity for
serious youth.
So .. What is Forex ??
It's trading in the international currency stock market
particularly the currencies of major economies like the United States, Britain,
Switzerland and Japan, the currencies of these countries is one of the most
world currencies used in the market Forex.
These currencies rose and fell influenced by political and
economic events of the major economic countries, in addition to the possibility
of trading in the precious metals market, oil, considering that technical
analysis (Follow-up graphics) is an integral part of market analysis and it's a
very important tool in any stock exchange in the world.
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