How to get money from Forex?

Preliminary

In the FX market we buy or sell currencies. Where the trading mechanism is verysimilar in most other markets (like stocks). So it is quite simple, and if you already have experience in stock should you will have no difficulty in doing forex trading. The purpose of forex trading is expected that the price will change where you buy the currency who experienced an increase in value, so you profit from the difference between these values.

Exchange rate / Rate is the ratio of one currency valued against another currency.
For example, exchange rate USD / CHF indicates how many U.S. dollars canpurchase one Swiss franc, or how many Swiss francs you need to buy one U.S. dollar.

Writing partner / forex pair is always written in pairs, such as GBP / USD or USD /JPY. The reason why they were written in the pattern of the couple, is because inevery foreign exchange transaction you are simultaneously buying one currency andselling another.

Here is an example of the exchange rate for the pound versus the U.S. dollar: GBP /USD = 1.7500 The first currency listed on the left of the slash ("/") is known as thebase currency (in this example, the British pound sterling), while the second on the right is called the counter currency (in this example, the U.S. dollar).

When buying, the exchange rate tells you how much you have to pay to buy one unit ofbase currency. In the example above, you have to pay 1.7500 U.S. dollar to buy 1British pound.

In forex trading, you will buy a pair / couple if you believe that the value of the base currency to rise or rise. And conversely, you will sell your partner if you think the base currency will depreciate (go down) relative to the counter currency.

Forex History

Since time immemorial, humans have been trading with the surroundings for various reasons by the barter system. Along with age and civilization perkembangnya barter system this fall because it has many weaknesses that are found the system - a new payment system until the end by using money as a medium of exchange and payment. Payment system by using the money also has a weakness to trade with a country that has a different type of currency.



The need for exchange rate arising from the currency of a country is usually not accepted as a medium or a medium of exchange in another country. International trade relations gave rise to the demand and supply on some currency. This then led to the development on the stock exchange foreign currency, so in need regulators to millions of demand and supply transactions that occur every day, leading to determining the value of foreign currency exchange rates.


The history of the exchange / currency trading can be said as old as money itself and not get their serious attention by many countries in the last decade. If the gold standard of review in the decade (1880 - the outbreak of World War I), at which time the money is guaranteed by the pure gold which is a standard country. Balance of payments deficit will be closed with the transfer of gold, to result in money supply decreases and prices rise as overseas, so this will increase exports to the deficit disappear, and vice versa. Thus, the value of the currency relatively stable.
Until World War I, the gold standard that enables the achievement of high levels of correction to the balance of payments. But not so in time of war, most likely due to the growth of trade unions and large corporations, a guaranteed wage and price so it is not easy to reduce this tendency, which affects the reduced employment. Because of swelling unemployment in the early 1930s, the gold standard is not used anymore.


After the war finished and the world economic depression in 1930 - an, the world wants a better economic stability. So On July 22, 1944, on the initiative of the United States, held a conference of the International Monetary known as: "The Bretton Woods Conference", which was attended by 44 countries. The proposal submitted by the delegation of the United States (White Plan) develop plans approved basis. At the conference, created a system of fixed currency exchange called the "Fixed Exchange Rate System", which has some similarities with the gold standard, which includes the following provisions:1. Each country set its exchange rate against the USD;2. Americans set a value of USD against gold (USD 35/ounce);3. America will sell gold at fixed prices to the official holders of the USD;4. Changes in currency exchange rates against the USD should not exceed 1%, when forced to up to 10% max.


Since then countries - countries in the world and America began to grow rapidly and two years after the conference, the international monetary institution was established & the World Bank that we know today with the IMF (International Monetary Fund) and the Word Bank, to oversee the system.


Then a change occurred in the United States, the period of the 1960s, the American balance of payments deficit to force the country off the gold reserves of USD 18 billion for France to exchange USD her with gold and continue in the period in the 1970s, Americans must again release the reserve gold at USD 11 billion. Poor U.S. economy at that time led the world community lack confidence in the USD. And in a country that has a strong currency because it has enough gold reserves, such as Switzerland and Germany, they exchange USD him with their currency is CHF and MDK. This leads to short-term debt that matures in the U.S. nearly reached nearly twice its gold reserves.


Bretton Woods system is only able to survive nearly 30 years, on August 15, 1971, President Nixon announced a change in the system exchange rate for USD to let its exchange rate floating (Floating Exchange Rate System), this is reiterated in a conference in Washington on 17 -18 December 1971 (Smithsonian CONFERENCE), hence the birth of a floating exchange rate and is valid up to now.


After President Nixon set the float value to the USD, many countries decided to float its exchange rate, such as: German, English, Dutch, Japanese and even years - following years many countries in the world to let the value of money floating in accordance with market mechanisms, namely forces of demand and supply.

Forex Definition (Part II)

Forex trading is traded in currency pairs are called pairs. For example USD / JPY pair, which means the exchange rate between U.S. Dollar and Japanese Yen. Oh yeah, before authors forget, there will be some of the terms or abbreviations that we will meet in the forex world.


Among the instruments of investment on the stock exchange, forex trading is the greatest instrument his capital. Large volume of trade of about U.S. $ 2 trillion (remember, in U.S. Dollars) was approximately 46 times greater than the commodity futures exchange markets (such as rubber, coffee, gold, etc.) others. Or thousands of times greater than the total transactions on the Jakarta Stock! With a capitalization of that, then known as the forex trading the most liquid and largest market in the world.


Only 5% of funds above that is the routine nature of government funds. The other 95% belongs to the investors free of many of the world. Truly the largest and most diverse market. Another plus is an investment instrument that is active 24 hours a day, 5 days a week. Starting from the markets of Europe, America, Asia and Australia. So unlike the Jakarta Stock Exchange which can only transact in the day, the forex trading (especially in online forex trading) we can trade anytime and anywhere.


Not all currencies can be traded here. Only a few developed countries currency which is used is USD (U.S. Dollar), JPY (Japanese Yen), GBP (British Pound) EUR (Euro) CHF (Swiss Franc), and AUD (Australian Dollar). So if we invest in the forex trading market, then we will not find pairs of IDR (Indonesian Rupiah) with CAD. That there are currency pairs that author mentioned before EUR / USD, USD / JPY, CHF / USD and so on. Remember our earlier definition, forex trading is the trading of foreign currency with other currencies.


This is one difference with the money changer in general. If you go to money changers and exchange your dollar amount, then that means you do a transaction with a pair GBP / USD alias Indonesian Rupiah to U.S. Dollar. This never happens in forex trading. Traditionally, currency trading currency of the country which is just fundamentally had advanced with a large volume of exports and stable imports.


The next feature of the forex trading is that he never physically traded. Yup, never. In contrast, if you have to go to money changers and exchange your dollars, then you are required to carry in your pocket physically. For forex, trading is not done physically.Recorded only evidence of any transaction and when you do a transaction. At the inception of all forex transactions are written in the form of a letter beharga. Then after the phone use is widespread, evidence of reduced transaction only be a short writing course which is called quotes. From this was born the term Dealing Quotes (DQ).


Today, forex trading is no longer done by telephone. It's getting outdated. Now its time online. Then all manner of transactions and evidence of any transaction done online.You simply fill in your user id and password provided by the platform provider (in this case called a broker or broker) and then, click ... and emerged all the details of your transaction. It is easier for everyone in forex trading because then anyone can do the transaction and more so, the transaction is no longer limited by place and time. Due to be handled by the system and no longer on the phone that in fact must be held by a man (the dealer) then the investor can invest forex whenever he wants as long as 24 hours a day with ease. The author even know a few housewives who play forex trading through his house. Capitalize internet on their home computer or laptop, then began the action they analyze the movement of nutrients.

Forex Definition

Ok, so you are a novice in the world of Forex. Maybe you know of friends work together, or from books you buy at the bookstore, or through advertisements on the internet. Forex trading really is becoming known among the public since the advent of online trading ways.

After reading or find out a bit about forex, you probably know how much potential profit in forex market trading. Hmm ... big enough in your mind. Large enough to fulfill all your dreams and it's worth it for the occupied.

"What is the forex is the same as money changer?""Or a trade like stocks?""From where profit can author get?""Is that legal?""Can you lose""Or what?"

Wait ... The author knows you have many questions. All these questions will we answer in this book. Well, then let's start our first introduction to forex trading. To ease your introduction to forex, forex trading authors would analogize with a money changer or stock. This is because most of it to know what the money changer or even stock trading.
If anyone asks the author what is forex trading then the answer can be very varied. But the author liked this simple definition: forex trading is an investment instrument in the form of foreign exchange trading in pairs. Forex itself has several other names such as Fx, margin trading, or forex trading. It's all more or less refers to forex trading.

The advantages in investing forex (forex stands for foreign exchange) obtained from the difference between purchase price and sale price of our currency traded. A simple example:In the last month Ujang buy U.S. dollar as much as $ 1000 by buying Rp.11.000, - And this month the exchange rate of USD rose to Rp 11,500, - per dollarnya. So when Amir sell dollarnya this month so he make a profit of (11 500 - 11.00) x 1000 = Rp.500.000, - Easy is not it?

Why, then forex exactly the same as when we change money at the money changer then? Yes indeed similar. So from the beginning was Writer analogy with the forex trading in the money changer. Similar is not the same. So there is a difference.Among the methods of trade is done with the form of margin trading and there is no physical delivery of goods.