Foreign exchange market – short Forex – stands for foreign exchange trading. The Forex market is one of the largest and most liquid financial markets in the world. Every day, sums of more than four trillion US dollars are converted here. The foreign exchange trading itself is carried out between the market participants, which is also referred to as an over-the-counter (OTC).
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How does Forex trading work? This is simply explained by an example: Suppose you plus500 scam want to open an onlineshop for the X product. For this, on the one hand, a supplier is needed, where one can buy the product X cheaply and on the other hand, of course, buyers, to whom the product X can be sold at a profit. How the Forex trading works. look at here now up However, this is not the product X, but currencies.
If you now transfer the above-mentioned example to the real world, this means that goods are bought at the wholesale store, and then sold at a profit. This functional principle is also known through the stock market. A stock is bought in the hope that the share price will rise, because then a profit is achieved. Otherwise a loss will be suffered.
Another Copy Trading platform possibility is that you are asked by a customer to get a specific product for 1,000 euros. If it is possible to procure the desired product under 1,000 euros, a profit has been achieved.
In summary, this visual comparison shows that for Forex trading, you can set on rising and falling currencies.
In principle, currencies are always traded in pairs, such as euro versus US dollar (EUR / USD). The exchange rate is always dependent on supply and demand. For example, if there is an increased demand for a particular currency, the price increases. In addition, the demand is also determined by different fundamental data. This includes, for example, the IQ Option scam level of interest rates of a particular country or the political and economic situation of a state.
A forex trader will make a profit if he is right with his assessment. If he assumes that the one price is higher than the other, he enters a long position. In the opposite case, he assumes a short position. As a result, profits can be obtained from falling and rising price developments.
It is important to note that there is a 24option scam standard quantity in foreign exchange trading. This is referred to as solder and is the set of units that are traded. A forex trader enters a position with a lot. This lot consists of 100,000 units of the corresponding base currency.
As a rule, the following quantities are traded:
Leverage can be used in Forex trading. For this purpose, a minimum capital requirement is deposited as security margin (margin) at the respective Forex broker, whereby a higher trading volume can be moved. While it is possible to make etoro scam huge profits, it is important to remember that the risk of loss also increases.
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For example, if a lever of 1: 100 is used, the margin is one percent. This means that profits (and losses) can now anyoption scam be achieved by up to 100%.
Particularly problematic is when the money paid for loss cover is not sufficient, because then the broker calls for a margin call. This means that additional funds must be paid.
Who are the market participants?
The main market players in foreign exchange trading are: Credit institutions, insurance companies, industrial and commercial companies as well as private forex traders. In addition, central banks also exert a strong influence on the Social Trading platform foreign exchange market.
As a rule, the market participants trade with one another over the counter. At the same time, action is possible almost round the clock (on Sundays 22:00 to Friday 23:00). On the one hand, this is the result of off-exchange decentralized trading and, on the other hand, the global time shift.