introduction to forex

 What is forex?

Forex simply means online foreign exchange.it is one  of  the  most  exciting,  fast-paced markets  around.  Until recently,  trading  in  the  forex  market  had  been  the  domain of  large  financial institutions,  corporations,  central banks ,  hedge  funds and extremely  wealthy  individuals. The  emergence  of  the  internet  has changed  all  of this, and  now  it  is possible  for average  investors to  buy  and  sell  currencies with the click of a mouse.

Benefit of forex

• A  24-hour  market:  A  trader  has  the  chance  to  take  advantage  of  all  of  the  profitable market  conditions  at  any  time  which  means  that  there  is  no  waiting  for  the  'opening bell'  like  the  exchange.

• Easy Accessibiliy: it is very easy to access ones you know how to access your internet connection on your laptop, android phone,window and other devices.

• Low  transaction  cost:  The  retail  transaction  cost  (the  bid/ask  spread)  is  actually  less than  0.1%  (10  pips)  under  the  normal  market  conditions.  At  larger  dealers,  the  spread could  be  less  than  5  pips,  and  may  expand  a  great  deal  in  fast  moving  markets

• High  leverage:  A  leverage  ratio  of  up  to  400  is  normal  when  compared  to  a  leverage ratio  of  2  (50%  margin  requirement)  in  the  equity  markets.  Of  course,  this  makes trading  in  the  cash/spot  forex  market  awkward  a  swell  because  it  makes  the  risk  of the  down  side  loss  much  higher  in  the  same  way  that  it  makes  the  profit  potential  on the  upside  much  prettier.

• Always  a  bull  market:  A  trade  in  the  FOREX  market  means  selling  or  buying  one currency  against  another.  In  essence,  a  bull  market  or  a  bear  market  for  a  currency  is defined  in  terms  of  the  outlook  for  value  against  other  currencies.  If  the  outlook  is positive,  you  get  a  bull  market  where  a  trader  profits  by  buying  the  currency  against other  currencies.  However,  if  the  outlook  is  negative,  we  have  a  bull  market  for  other currencies  and  a  trader  profits  being  forced  to  selling  the  currency  against  other currencies.

• No  one  can  corner  the  market:  The  FOREX  market  is  so  large  and  has  so  many participants  that  no  single  trader,  even  a  central  bank,  can  control  the  market  price for  an  extended  period  of  time.  Even  when  interventions  are  conducted  by  mighty central  banks  are  getting  to  be  increasingly  ineffectual  and  short-lived.  This  means that  central  banks  are  becoming  less  and  less  inclined  to  intervene  to  manipulate market  prices.

 What do you need to start?

• Your personal computer
• Stable and high internet connection
• Limited fund:it is recommended to start with demo before you deposit is made.
• Reliable and trusted forex brokerage (brokerage means A business, firm, or company whose business is to act as a broker or mediator between buyer and seller)