Forex, over-the-counter trading on exchange rate differences, is based on measuring one currency unit in another. The market arose simultaneously with the advent of paper money, but until the mid-19th century it served the state treasury and large commercial banks. By the beginning of the last century, stock traders entered the market. In the 1970s, dealerships appeared that proposed the modern principle of lending to customers: about $ 1,000 was required to complete the transaction, the company provided the missing funds. With the development of information technology and the expansion of participants, the required minimum has dropped to 100, in some companies to $ 20. FOREX acquired a modern look in the 1990s. Contrary to simplicity It seems like a scam or a complicated cocktail of psychology with mathematics. However, starting a trade is much easier than it sounds. Need an accurate understanding of several
moments.
The first step is to select a dealer, in other words, a company that provides access to the FOREX market. It is important to check the reliability of the company according to reviews on the forums of traders. The second point, the comfort of working with the company: the convenience of the trading platform, the size of the minimum deposit, ways to replenish the account and withdraw profits. It is important to read the agreement and related documents. Requirements to constantly maintain open positions, vague wording and promises of 100% profit are the first signs of fraud. Signs of stability: the Commission for regulating the relations of participants in financial markets (KROUFR) is under the control of, accepting and paying through payment systems operating in Russia, a minimum of negative reviews on the forums of traders and work on the domestic market for more than 15 years. Before making money for a deposit (live account), practice a demo. This is a virtual money trading at real quotes. Forex for beginners includes simple rules:
1) Try to avoid transactions 15 minutes before and after the news release. Look at the chart, analyze what is happening. Make your forecasts, note the estimated price movement.
2) Having opened the terminal, make your forecast for the day. Determine the levels of maximum rise and fall of quotes, possible stops during the day.
3) After making the forecast, wait an hour, no matter how attractive the movement of quotes may seem. Analyze your forecast, because the market follows any theory less than a third of the trading time.
The basis for quick reading of the chart is a quote, an expression of the value of one currency in another. Consists of two parts. The symbolic part is written in short abbreviations on the left: what currency and what is valued. Currencies are indicated by three, less often four capital letters of the English alphabet. The first two indicate the country: US - USA, JP - Japan, GB - Great Britain. The latter means the currency: D - dollar, Y - yen, P - pound. respectively.
For example, the designation EUR / GBP stands for an estimate of the value of the euro in British pounds. Next, a four- or five-digit number expressing the value is indicated. The full view of the EUR / USD quote: 1,203 means: 1 000 euros costs 1,203 US dollars. Quotations expressing the value of the currency in US dollars are called direct. An expression of the value of the American dollar in another currency is called a reverse quote, one of the common examples of USD / CAD. A cross rate is a quote devoid of the expression of the value of the currency in US dollars. Quotes have 2 prices: Ask, or sale, and Bid, purchase. The difference between them, spread, dealer net profit. When buying currency (By), the transaction opens at the Bid price and closes when Ask is reached. A sale is opened at Ask price and closed at Bid.
Undoubtedly, trading on FOREX is simple. However, novice traders should set a limit on daily earnings and leave the market contrary to expected profits. Caution helps to preserve and increase capital.