Forex Trading

Forex Trading is a wide field of investment and inexhaustible to be dug. It is said that the journey of a thousand miles begins with one small step, then first learn the basics of forex trading the following and familiarize yourself to the forex terms that facilitate your learning.
 

Foreign exchange, better known as forex (FX), is one of a growing investment option in the World. Forex trading is the trading exchange foreign currency money market internationally. Forex is different with the money changer. If the money changer buying and selling foreign currencies are physically (have a place and stuff, in this case money, which can be traded), forex transactions done by transfer of funds on account of their inter-bank transactions.

Actual existence of forex trading has long been available since the discovery of techniques to convert the currency of a country into another country's currency. However, there are new institutions after the establishment of an arbitration agency of futures contracts (futures). An example is the IMM (International Money Market, founded in 1972) which is a division of the CME (Chicago Mercantile Exchange-specific product handling perishable commodities). Another example is the LIFFE (London International Financial Futures Exchange), TIFFE (Tokyo International Financial Futures Exchange) and so on.

Frequently traded currency is the currency of the developed countries like the U.S. Dollar (USD), Japanese Yen (JPY), Swiss Franc (CHF), British Pound (GBP), Australian Dollar (AUD) and Euro (EUR). All currencies are traded in pairs (called a pair), for example EUR / GBP, CHF / JPY, etc.

Turnover that occurs on the forex market to reach U.S. $ 5 trillion per day (survey-BIS-Bank for International Settlements in Setember 2008). This amount is 40 x greater when compared to the velocity of money in such commodity futures exchange or any other stock market in each stock exchange of any developed country! This means that the trading volume of that size, this market is highly liquid (liquid), and control of trade can not be held for only a few parties that have large capital. Currency movements are entirely dependent on the market. There are many large and small players in forex trading, but none of them are able to control the movement of foreign exchange rates.

Then where did I gain from this investment? In simple, the benefits of this investment is obtained from the difference when we buy and resell the currency of the country concerned. For example, in April, John bought a dollar with the exchange rate of Rp. 8500, - per dollar of U.S. $ 1000. So at the time of this currency to pay John as much as Rp. 8500, - x 1000 = Rp 8.5 million, - Then in May, the dollar strengthened against the yen exchange rate of Rp. 9500, - per dollar the net profit that John got when he sold the dollar return is equal to: (9500-8500) x 1000 = Rp. 1,000,000, - Easy and simple is not it? And because the average time it takes to buy and sell back the currency in question is usually not more than one month, then forex trading are classified as short-term investments.