Financial Freedom and Forex
Forex represents a unique opportunity to obtain super profits. This market regulates all international financial currency trade and not only. Sugar, wheat and oil, everything is subordinated to the Forex market. Currency transactions are a priority activity. But not only currency is a financial instrument that is operated in Forex market, here are actions, futures and bonds on the run.
Characteristic of the currency market
The volumes of Forex’ transactions are simply huge, only during a day they reach for 4, 5 trillion dollars. Currency turnover is much higher that the cost of all actions that are put on the market. That is why Forex market is so attractive for traders from different countries. For trader who follows the rules of financial risk management has their strategy and constantly improves it. Forex trading can be the basis for success long enough.
Forex was formed in the early 70s of the 20th century, when the economy of many counties began to use a floating exchange rate. At the same time, exchange rates began to be determined by the most democratic method when the countries exchanging their currencies were mutually agreed to this.
Stock exchanges usually have a certain location, Forex does not have its own specific place. Transactions here are settled through software terminals and can occur regardless of location. The advantage of Forex from other types of trading is that trading does not stop throughout the work week. In each time zone there are always those who are willing to exchange one or another currency at any time, while stock market works only in certain daytime and stops working at night.
The main difference between currency transactions is that these are so-called marginal transactions and that is why they are not regulated by any controlling body, all the terms of such transactions are agreements between the trader and broker with which the broker operates. It is enough to start a trading account and it is possible to start trading. Margin credit, obtained from the dealing center by a trader, allows him to trade much more than he has on his deposit. The size of this leverage is 1:50, 1:100 and even 1:200 for brokers and that is, it is possible to have one thousand dollars and trade with a sum of hundred thousand dollars.
If you want to trade successfully, you need to know such methods as technical analysis, that is, understand the price movement charts, fundamental analysis, to know the trading risk methods and have the idea of trading psychology. Technical analysis is used to predict the price movement chart on the basis in which direction the financial instrument that is trading is going. Such movements could be of three types: up, down and lateral movement, and also how long this tendency will last. With the right prediction, this will give the opportunity to buy or sell the currency in time and get profit. Fundamental analysis allows you to interpret correctly the emerging world news, economic statistics and it accordance with them to open or close positions, remaining in profit.
The fact that trader knows technical and fundamental analysis is not a panacea, since it does not insure against losses, but the right risk manager allows the trader to reduce his losses much more than normal. Only compliance with the rules of risk insurance makes it possible to survive the setbacks and get out of them with positive dynamics in profit. And yet the main is not in the above. The main and necessary is the trader’s behavior psychology when trading in the foreign exchange market. Everything we did not know about ourselves here is particularly acute and most often affects the results.
Psychological aspect of trade
Self-confidence or vise versa uncertainty, panic behavior while making deals play us bad role. Traders who do not know psychology merge their deposits quickly and abandon trading on Forex. The trader must learn to analyze how the main part of traders behave themselves, that is the crowd and predict the market reaction on this. In this case the probability of success increases harsh.
Considered in this article is just a small part of the necessary to achieve financial independence and success, trading on Forex is very versatile and those who understands this and makes the right conclusions will succeed in any situation.