What is one of the most common desires of adulthood? Financial prosperity, as we all want to be secure and able to live the life we want to. However, in a rather turbulent world, with ever-increasing inflation and prices, it becomes difficult to satisfy all the needs. Thus, there is a demand for the tools and instruments that will help to make a living in such an unstable world, like Forex Trade.
Forex trade is an opportunity to make a stable profit in our age of instability. Let’s discover the basic things you need to know about Forex to become a part of Forex’s ‘society’.
What is Forex?
Forex trade is a foreign exchange currency market. Its daily turnover can reach $5-6 trillion depending on the season and global geopolitics, which makes it the biggest financial market in the world.
The Forex market is based on the currencies’ performance on a global scale. The traders are supposed to anticipate the movement of the currency value, one against the other, and make appropriate ‘bets’. The profit is made regardless of the ‘falling or rising’ rates of currency, the main point is to predict the value as precisely as possible.
The major participants are banks, governments, hedge funds, insurance companies, enterprises and private companies, and retail traders (trade with brokers).
The Basic Things to Know About Forex
1. The Brokers
Retail traders can access the Forex market through specialized brokers, who are licensed by appropriate authoritative bodies. The broker operates as an intermediary and makes all the trade possible.
When you google the forex brokers, you are sure to be offered countless offers, with quite alluring promises, low fees, and ‘no commission’ entrance. However, it is important to be vigilant.
Before registering with the Forex broker, it is important to compare the available options according to their core features:
1. The license from authoritative bodies
The license is a key to safe and secure Forex trade. Among the regulatory bodies, we can distinguish the national ones like the Financial Conduct Authority (FCA) in the UK, supranational, like the European Securities and Markets Authority (ESMA) in the European Union, or external dispute resolution (EDR), and the local ones, validating the functioning of the broker within certain geolocations.
2. The platforms
There are two major platforms to use – MetaTrader 4 and MetaTrader 5. While the MT4 offers all the tools for currency trade, MT5 has a more extensive choice of assets to trade.
3. The commissions
The brokers make a profit from spreads, fees, and swaps; some may lower the spreads, yet increase the fees, or vice versa. An appropriate “payment” style should be chosen individually.
4. The assets available for trading
Forex trade initially offered currency trade only, yet now, the traders might also trade other assets like commodities (typically, energy-related substances), shares, cryptocurrencies, and indices (performance of a group of companies, or currencies).
For instance, the commodity xtiusd adalah is referred to as West Texas Intermediate (WTI) crude oil expressed in the US Dollar; the indices ‘USDX’ indicates the value of the US dollar against six other international currencies: the Euro, Japanese yen, Pound sterling, Canadian dollar, Swedish krona, and Swiss franc, etc.
Make sure the broker-to-be offers a wide array of options.
