Route to invest in Forex Market. All the words in bold in this text lead to the relevant articles for further study.
In this article we will summarize the steps, from A to Z, that you must follow to get closer to Forex and start trading successfully.
The first step a forex novice must take to approach this world is to choose a broker to negotiate. Since this is a delicate option, you should do so in a reasoned way, reading the various reviews of the brokers and obtaining information in the numerous dedicated forums, both in Italian and English. Since all brokers also offer a trial account, we could also consider testing in different brokers, to see the “feeling” with the trading platform.
Only the test account is an absolutely essential step that newbies should take, to avoid making mistakes and losing money. Some brokers offer you a test of up to $ 100,000, obviously false, to do all the operations you want. Always remember that the trends of the index and the currency are real, even in probatory form.
Once you have opened your test account and tested your strategies, always keeping in mind the “tricks” and strategies found in meteofinanza.com, and you feel ready to open a real account, you just need to make a deposit and start “playing”. “The minimum deposit depends on the agent you have chosen, usually from $ 50. You can pay in different ways, for example, through Paypal, Postepay, bank transfer or post office.
The advice is to start with some raw materials, like oil. The reason is that, if you buy the least amount of oil possible, each pip will have a value of 10 cents, compared to 50 cents for the minimum purchase of foreign currency. You will earn less, but if you make mistakes, you will lose less and you will be able to correct them more easily.
Always remember to keep up with financial and economic events around the world, as they affect the value of currencies and indices. Learn the best strategies and the correct reading and interpretation of the graphics.
Who operates in the Forex market?
There are several people who act in the Forex market, this is known. It is interesting to know who are the different groups of people who work every day in this big market because in this way you can learn more about the Forex sector.
Forex Market: course and complete guide.
We can divide the merchants into two large groups , let’s see what. The first group consists of hedgers, which represent less than 5% of currency traders. These are companies and other types of organizations involved in international trade. Its main objective is to reduce or neutralize the impact of currency fluctuations through the use of different market instruments.
The second group of people who work in Forex, which then forms the other 95%, is made up of speculators, private companies and individuals that trade with local companies, as well as public organizations and banks. The purpose of these issues is to obtain a certain benefit from the fluctuations of the exchange rate of the currencies, exploiting the great liquidity of the Forex market.
Speaking of groups of people operating in the Forex market, we can not forget the market makers. Almost all the offers in the market are made by several merchants and market makers. Basically, they are people who perform coverage work for their clients, based on their operational policy, which may include different guidelines and different agreements. The most common examples of market makers are banks or commercial platforms, which do not represent the customer as an intermediary, but use the client’s money to buy and sell financial instruments. They are also people who do not have a direct and unique relationship with their clients and generally manage all positions as a whole, detect interesting movements and act for all clients at the same time.
How the Forex market behaves
According to the Bank for International Settlements, the total volume of transactions that are made every day on the currency market is almost 4 billion dollars, a sum that, in terms of liquidity, has no equal in the world.
The forex market is the most liquid market in the world, with more than 150% growth in capital invested over the last five years. It is a truly global market, both because it is valid worldwide and because it operates 24 hours a day. Traditionally it was reserved for institutional investors, but for more than a decade this market has begun to open up to individual investors through online investment platforms that allow you to “forex” from anywhere in the world, even comfortably from home. Today, the total daily volume in this market is 4 billion dollars, which does not allow anyone, not even the big banks or investment funds, to control the price of currencies, which certainly benefits the small customer.
The competitive advantages of the foreign exchange market compared to other markets are quite evident, with the lower commissions due to the large size, the absence of a monopoly price, the strong liquidity (which we have already mentioned), the ability to negotiate the 24 hours. Day and especially the absence of systemic risk.
In fact, currencies are an excellent resource to diversify your portfolio. The retail investor fully understands that identifying the movement of one currency against another to generate consistent returns is something that can also depend on the indices or economic conditions of a given economic zone. We will see this concept better in the next article, and we will make a concrete example so that we can understand it in an even more optimal way.