If you want to start working on Forex, you swung at the ambitious task of mastering all the details of it. However, the online Forex activity is a fascinating way to earn money.
As a rule, brokers and companies offer to trade not only currencies but also stocks, government securities, precious metals, and so on. Different brokers may have different trading options.
What Is the Essence of Forex?
Trading on the Forex market can occur in currency pairs: euro-dollar, dollar-pound, euro-pound, and so on. You purchase one of the components of a pair with the expectation that it will become higher in price relative to the second. Having sold it in time, you win on the change – this is the source of your profits.
When a trader realizes that they have already earned enough, and the value of the asset can go in the opposite direction, they close the deal. It is also possible to close a trade if an erroneous investment is made and the trader starts to lose. Thus, they fix the situation.
In addition to currency, you can purchase raw materials or other things with the expectation that they will become higher or fall in price. At the same time, you do not really need to have shares or goods. Exchange tools also allow you to play for a fall. This is a fairly effective tool that provides for lending against the obligation of further repurchase.
It is important to understand which assets will change in price and how. To do this, one analyzes the market, financial news, and the behavior of other investors or acts trusting intuition.
To simplify and secure trading, there are several technical elements. You can set the automatic closing of the transaction under adverse circumstances or attach to a well-known trader and automatically copy their trades.
Where to Start?
Frankly speaking, starting trading is no more difficult than understanding mobile banking. In fact, you just need to register on the site or in the mobile application. Some companies ask you to download a terminal (special program) to your computer.
Then, you should transfer funds to your account, and you can start trading. The money can be just as easily withdrawn back.
The minimum amount required to start may vary from company to company.
Where Does the Money Come from?
Some mistakenly believe that Forex is an analog of the lottery. One of the arguments of those who believe in it is the huge income that can be obtained from these operations. For example, you bet $200 that the euro will rise in price against the dollar. It happens so, and in a minute, you have $220.
Nevertheless, at the same time, it is obvious that the euro has not risen in price against the dollar by 20%. So, where did $20 come from? The fact is that brokers offer clients to carry out operations with a multiplier or leverage. In effect, this means that when you place a bet, it is supported by other market participants, usually the world’s major banks. The multiplier can be hundreds or even a thousand times more than your funds.
Therefore, even a slight fluctuation in quotes allows you to get a benefit. At the same time, the one who provided the multiplier also earns, although a much lower percentage.
The size of the multiplier for most brokers can be chosen independently. That is, if you do not want to take big risks, you can set a multiplier of 2 or 3 or even completely abandon it.
Make first steps, and your experience will help you to succeed.