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UNDERSTANDING FOREX TRADING

UNDERSTANDING FOREX TRADING
In the opinion of many people forex trading is one way to get rich quick, but if it is not accompanied by sufficient knowledge and regular practice, then forex trading activities will be very risky, because in reality forex trading is not as easy as imagined, it really requires serious discipline and perseverance since I was still in the learning stage to become a professional trader, in order to be able to get profit consistently.

Forex Trading

For this reason, for beginners, before actually getting into the forex business deeper, you should look for sufficient knowledge and practice more so that they have sufficient experience and flying hours so they can clearly understand what forex trading really is.

List of contents
WHAT IS FOREX TRADING?
Forex is literally an abbreviation of the two words Foreign Exchange (foreign exchange / foreign exchange). Forex trading is an activity of exchanging foreign currencies in currency trading carried out by people from various parts of the world with the aim of profiting from price differences when buying or selling transactions are made.

In a case, there is someone who wants to go to America, then in general that person will definitely exchange his country’s currency into a currency that can be used in America, namely US Dollars / USD. Well, this activity is called the exchange of foreign currency / foreign exchange.

However, foreign currency exchange is usually done manually at a money changer, so that in the view of ordinary people, foreign currency exchange as in a money changer is also referred to as forex trading activity. In fact, the activities of exchanging foreign currencies in money changers and forex trading are a different matter, both in terms of process and purpose.

Also Read: How To Read Foreign Exchange Rates?
The forex trading process is through an online network with the aim of profiting from the difference in buying or selling of traded currency pairs. So, forex trading can also be referred to as a business, investment can even be used as a profession.

FOREX TRADERS
Who are the forex traders ? In the international world, foreign currency trading activities are carried out by many parties, whether by governments, central banks or multinational companies, even including people who have large assets in the form of very large amounts of money, or commonly referred to as big players who take advantage of assets. to invest in world financial markets.

The activities of buying and selling foreign currencies carried out by many parties are not carried out in a market as seen by most people but are carried out in a market that is not visible to the naked eye in a centralized online network called the ” Forex Market “.

With the development of the world of technology, forex trading is now able to reach a very wide area. So, through the internet network as the world of technology develops, forex trading can now be done anywhere, by anyone and at any time, even forex trading can now be done with only 1 USD of capital.

ADVANTAGES OF FOREX TRADING
HAVE HIGH PROFIT OPPORTUNITY
The advantage that can be obtained in forex trading is that it gives traders the opportunity to get very large profits in a short time or commonly referred to as high profit . For traders who already have qualified skills, this is a proven necessity.

Trading skills that are continuously honed without getting tired, both in terms of knowledge through measurable forex learning patterns and regular practice will form the character of good trading skills.

UNLIMITED BY TIME
Forex trading is not limited by time like other financial businesses. The forex market, which is always open 24 hours a day in 5 days, makes all traders have the opportunity to open transactions whenever they want.

Each trader can set his trading time according to his conditions and desires freely, or he can also use the best forex trading time which is commonly used by professional traders.

UNLIMITED BY SPACE
Forex trading is also not limited by space and place. With the development of technology as it is today, trading activities can not only be carried out using a computer-compatible platform.

Trading platforms based on android and iphone now make it easier for traders to carry out forex trading transactions so that through this mini platform that can be taken anywhere, traders can easily make transactions wherever they want.

TWO WAY TRANSACTIONS
Prices are always moving from time to time is a very interesting thing in the world of forex trading . Through these fluctuating price movements, traders can enter positions , both when prices go up or down.

This type of two-way transaction can be done in forex trading. When prices move up, traders can make buy entries , while when prices move down traders can also make sell entries .

DISADVANTAGES OF FOREX TRADING
HAS HIGH RISK POTENTIAL
The most prominent drawback in forex trading is that it has the potential for high risk (high risk). Beginner traders who are not equipped with sufficient forex knowledge, will be very easily afflicted with this risk.

However, it is not limited to just novice traders, often professional traders will also experience losses. The factor of the magnitude of this risk is not only limited to the trader’s lack of knowledge, but other factors also sometimes have a detrimental effect on traders such as psychology and emotions.

MANY FACTORS AFFECT PRICE
The factors that influence price movements are very diverse and varied. Economic, political, social factors and even market sentiment can influence the volatility of price movements.

So that in addition to technical analysis techniques, traders are generally advised to understand fundamental analysis techniques by reading the economic calendar and news about the socio-political situation of a country, so that their capital is not eroded by an event that is affecting price movements.

HIGH LEVERAGE HIGH RISK
The use of leverage that is too high allows traders to make trading transactions with amounts of money that are many times larger than their capital. Suppose you use 1:1000 leverage then it is the same as you are trading with $ 1000 with only $ 1 capital.

Also Read: How To Trade The Economic Calendar
Compared to the high risk that can be experienced by traders, the use of high leverage also has the potential to generate high profits as well.

MANY FRAUD HAPPENS
Be careful for those of you who are just starting to trade forex. The potential for fraud in the forex world is also very large because the forex business is carried out through the internet network whose transaction processes are not carried out face-to-face, so it is very easy for fraudsters who want to trick their victims on behalf of the forex business with various modes and operandi.

The most common frauds are carried out by rogue and fake brokers, which are usually carried out with the mode of giving sweet promises. Based on that fact, it is very important for traders to know how to choose the best and most trusted forex broker and which forex brokers are recommended.

MUST RELY ON YOURSELF
Many forex brokers or forex trading services offer passive trading facilities with large profits. Passive trading is a trading activity carried out by a broker or individual using the capital you invest in the broker or forex trading service.

If you really want to be a professional trader who can consistently earn profits, then you should make forex trading transactions independently without depending on others, because the more experience and experience you have, the better and more qualified your trading skills will be. .

The purpose of the act of relying on others is in trading activities, not in the learning process. You can learn forex trading with anyone, exchange experiences and strategies to increase your trading insight.

Hope this explanation is useful. Happy trading and profit greetings!

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