Basic Knowledge of Forex Trading that New Traders Must Understand

February 28, 2020 Off By Nicole

Basic knowledge of forex trading that must be understood by new traders, if you want to start learning Forex, then try to find various sources of information. Forex or also referred to as foreign exchange investment activities are trading in buying and selling foreign currencies with very large capital. Many ordinary people consider it a dark business or some kind of a bad thing like gambling. However, the principle is not so because Forex movements are regulated and occur in the free market.

All activities get direct supervision from the official financial body or Bappebti so the broker who runs it must have a permit. While the movement of foreign currencies is influenced by many factors, especially the condition of the world economy or a certain country. Everything is not regulated by a party or an organization but the pure exchange rate occurs naturally so it cannot be called gambling.

Initial Explanation of Forex Trading

Foreign exchange type of trade or the process of buying and selling foreign currencies if interpreted broadly. But that does not mean having to exchange like traders in general but exchange a pair of currencies to get profit from the difference in transactions. As an example, you buy USD when the exchange rate goes down to be cheap. Then when prices stabilize and the USD is at the peak, resale in Rupiah.

Forex trading is called foreign exchange or foreign currency investment, which is now increasingly popular in various circles of society. This activity used to be played by conglomerates, government agencies or large businessmen but now it is not. Young people are interested in making it a profitable business with large profits quickly. What’s more, Forex provides convenience in the form of a minimum capital transaction value of small compared to shares.

The Forex Market is the largest in the World

Forex has a broad market or market with a liquid and safe nature. Traders are allowed to choose their own type of market according to the wishes and currencies of certain countries. Meanwhile, also know if the Forex market participants are also various kinds, such as governments, companies, multinational banks, central banks, legal financial institutions, and so forth. The market moves 24 hours, but each country has a special schedule as follows.

  1. The movement of foreign exchange or currency trading transactions starts from the Australian and New Zealand markets, precisely at 05.00-14.00 WIB.
  2. After ending, then proceed to the Asian market area located or it’s center in Singapore, Hong Kong, and Japan. The trading schedule starts at 07.00-16.00 WIB.
  3. Further price movements towards the European market, including the two major countries of England and Germany, 13.00-22.00 WIB.
  4. Forex market trading will end in New York, USA from 8:00 to 5:00 in the morning.

The Many Advantages of Forex Trading

It can be said that Forex investment activities are indeed the most lucrative when compared to other types such as buying and selling shares, pairs of capital in companies, trading, property or land. If you are lucky, the results will be huge, but you should at least prepare the first capital money with large embroidered around hundreds of millions of rupiah. of course for beginners or young people are very objection to these conditions.

Meanwhile, Forex transactions are lighter which can provide a small amount of capital. Only with hundreds of thousands of rupiah, forex trading can be started practically through trusted broker brokers. Besides the ease of the trading process, another advantage of Forex lies in the very high liquidity value. You can get a large profit if buying and selling on the free market because the funds are unlimited and quickly disbursed.

Because trading is enough to make players feel confused, there are many free facilities available on the internet. For examples like a demo account Forex transactions through smartphone applications and even certain sites that provide these features. Prospective investors can practice in advance on how to manage these activities without having to use real money capital. This solution is best for improving the analysis ability of traders so they are familiar with the forex trading system.

Basic knowledge according to the explanation above will greatly help online forex traders to start investing. Even more so if you want to manage your own transactions without the help of a broker at all. That way the profit obtained is much more abundant and only gives spread or broker commission only. Also pay attention to continue to improve your knowledge and be diligent in learning Forex, especially economic news and statistical data about market movements.