Forex stands out as one of the markets with the largest transaction volume in the world. It is necessary to know how to play forex in order to be able to trade in this market with an average daily trading volume of 6 trillion dollars.
We will examine in detail what is forex, how to play forex,
which provides alternative earnings to its investors other than stock markets, which are frequently preferred among financial instruments.
What is Forex?
Forex is defined as one of the financial investment tools,
which is derived from the English Foreign Exchange words. With Forex, it is possible to make a profit by investing
in foreign exchange, commodities, stocks and indices. Forex transactions can be
carried out 24 hours a day, every weekday.
In order to make forex transactions, it is necessary to open
forex accounts with banks or brokerage houses. After opening a Forex account,
you can start investing by depositing collateral into the account. More than
100 products can be purchased and sold to profit from the rise or fall of
prices.
Compared to other financial markets, Forex has many different features and advantages. To better understand what Forex is, it is necessary to take a look at these features. In order to make successful transactions in the Forex market, all the details of the forex must be well known.
Forex Features
There are many different features that distinguish Forex from other investment tools. In order to learn Forex and start trading in this market, it is necessary to take a closer look at what these features are.
- Leveraged trading can be performed
- Provides the opportunity to earn high profits with a small amount of investment
- High volume transactions can be opened with a small amount of investment
- Investments can be made in foreign currency, commodities, foreign stocks and indices abroad.
- Thanks to two-way transactions, income can be obtained from both the rise and fall of the prices.
- Transactions can be carried out 24 hours a day, every weekday.
- Transactions can be carried out online through forex platforms.
- Hedge (hedging) transactions can be carried out in order not to be adversely affected by the change in exchange rates.
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How to Play Forex?
With Forex, you can buy and sell multiple products such as
dollar, euro, gold and oil. If you ask what is the logic of Forex, it is
possible to explain it with a simple example.
Just as we buy and sell gold from a jeweler to invest, it is
possible to buy and sell gold with forex. Similarly, foreign exchange buying
and selling transactions such as dollars and euros are made from the exchange
office, and foreign exchange transactions can be carried out via forex. The
logic of Forex is that these buying and selling transactions can be done
through an online platform.
Another important feature of Forex stands out as allowing
transactions with leverage rates. Thanks to leveraged transactions, investors
can trade with a volume much higher than their deposits. For this reason, it is
possible to gain high profits from forex transactions.
Forex Profit and Loss Calculator
In order to better understand how to play forex, forex
profit and loss calculation should be well known. Explaining these calculations
with an example becomes more understandable for investors.
Sample;
Let's assume that a forex account is opened with an
investment of $1,000 (two thousand). If the forex leverage ratio is 1: 100,
it means; It happens that a maximum of 100 times the balance in the account can
be processed.
Forex transactions can be opened as if there were 1000 x 100
= 100,000 (one hundred thousand) dollars.
If asked how to calculate Forex profit and loss; The answer
is not based on the initial balance deposited into the account, but on the
trading volume made with the leverage ratio used. So, returning to the example
above, if the full leverage ratio of 1: 100 is used, the profit and loss in the
transactions is evaluated over $100,000.
Lots are used to indicate the transaction volume in Forex
transactions. 1 lot of transaction equals 100,000 units.
1 lot: 100,000
0.50 lot: 50,000
0.10 lot: 10,000
0.01 lot: corresponds to a transaction of 1,000 units.
In order to learn how to play forex, it is necessary to
learn how to do forex transactions. In order to learn Forex transactions, it is
necessary to take forex training and practice on free forex demo accounts for a
while.
Forex Training
Forex training becomes a priority for all investors who are considering trading in forex. Investors can receive basic, intermediate and advanced level forex training according to their knowledge of the forex market.
Forex trainings can be taken at banks or brokerage houses
that are planning to open an account, or can be learned easily at home / office
with our own facilities. Institutions often offer Forex training free of charge
to their customers. Forex trainings can be delivered face-to-face in the
office, or can be carried out online through customer representatives by
establishing a computer connection.
Investors who want to learn the Forex market on their own
can access online forex training videos and forex training documents on the
web. At the same time, detailed information about the forex market can be
obtained through many articles written about forex.
Regardless of the conditions for forex training, it is
recommended to make trial transactions in forex demo accounts. Forex can only
be understood clearly by putting it into practice in front of the screen. The
fact that leveraged transactions can bring high profitability as well as having
the risk of loss makes the use of forex demo accounts mandatory.
Forex Demo Account
Forex demo accounts are tested on trial accounts, which are
used to learn forex and allow trading with virtual money. Thanks to Forex demo
accounts, investors can turn their buying and selling transactions into
practice.
With trial accounts, forex profit and loss calculation is
made better, and information about market risk is obtained. People whose risk
profile is not suitable for trading in the forex market may stop opening an
account in this market.
Forex demo accounts can be easily applied for free. The Meta
Trader 4 application can be downloaded to the computer or phone and quickly
access the forex platform with a username and password. Through the platform,
all products can be bought and sold with virtual money.
After sufficient practice is reached by trading on Forex
demo accounts, it is now ready for real account opening. It is recommended to
use forex analysis when trading in Forex real account. In order to achieve
success in forex trading, forex analysis must be known correctly.
Forex Analysis
Forex analysis serves as a guide for investors to be
successful in forex transactions. A position in the right direction can be
entered thanks to forex analysis, which helps to predict the future movements
of the prices.
Forex analysis is divided into two as fundamental analysis
and technical analysis. Fundamental analysis; It helps us estimate the price by
interpreting the socio-economic indicators of a country. For this, it becomes
important to follow the economic calendar announced daily.
Major fundamental analysis data; Non-farm employment data
can be shown as unemployment figures, inflation and growth figures. The arrival
of the announced data within the expectation of analysts has a positive effect
on prices, while the opposite of the expectation has a negative effect on
prices.
If we look at the technical analysis data; It covers
statistical drawings on charts, especially forex indicators and patterns. With
technical analysis, the future direction of the prices can be predicted based
on the statistics determined according to the movements of the prices in the
past.
How to Open a Forex Account?
After forex training and trial operations performed on the
demo account, it is now learned how to play forex. If the risk profile of the
investor is suitable for trading in this market, forex real accounts can be
opened.
For Forex real account opening, it is necessary to contact
banks or brokerage firms. E-mail and telephone information are transmitted
during the forex real account application to be made through the web page of
the companies. Then, procedures are carried out through customer representatives.
For Forex real account opening, identification and address
statement is required. The address declaration can be made via an invoice or
settlement document registered in your name. The account is opened by signing
the contract for the purchase and sale of derivative instruments.
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