【Forex】What is Forex Trading? Why you should do forex ?

Hi, traders, Hiro is here.

I believe most people who are watching this article are newer traders.

In this article, I am going to explain really basic things of forex trading which you have to know before starting real trading.

 

What you can get from this article is below

① What is forex trading?

②How can I make profits by this?

③ Why you should do forex trading? The reasons why I recommend doing forex for beginners

④ Basic trading terms you need to know before trading

 

① What is forex trading?

Forex often referred to as ‘foreign exchange’, is the buying and selling of different currencies

to exploit fluctuations in the marketplaces (through arbitrage)

or adjustments in market prices over time: a decentralized global market in which all the world’s currencies trade.

It is the largest, most liquid market in the world with

an average daily trading volume exceeding $5trln.→(https://www.syndicateroom.com/alternative-investments/forex

 

② How can I make profits through forex trading?

 
 
In forex trading, you are going to make profits using gaps of each currency’s value.
 
To make money through forex trading, you need to buy currency at low price and
 
sell it at higher price or sell currency at high price and buy it at lower price.
 
If you do conversely, it means you lose money.
 
 
For Example, 
 
You bought USD dollar at $1=¥100.
 
And one month later, USDS dollar’s value rose up to $1=¥120.
 
In this case, it means that you make profits of ¥20.
 
You could make profits because you bought USD dollar at low price and sold it at higher price 
 
If you bought $10,000, the profits would be ¥200,000.
 
This is how forex trading actually works.
 
People tend to think forex or any other financial markets are very difficult to tackle with.
 
But honestly, it is super simple and easy to understand as I explained above.
 
 
 

③ Why you should do forex trading?

 

The reasons why I recommend trading forex are below.
 

1, You can make money largely with a small start

Generally, when you try to start investing like stock or other financial instruments,

you gotta prepare large money to make large profits.

But, when it comes to forex trading, you can use ‘Leverage’ in your trade.

This Leverage makes it possible to trade with much bigger money in your deposit.

 
For Example, 
 
You have $1,000 in your deposit.
 
If you trade with 10 times leverage, it means that you can trade with $10,000 ($1000×10). 
 
Even if the price moves only 1%  in your favor, you are gonna get 10% profits by using 10 times leverage.
 

2, It is possible to make profits even in the recessions

One of the biggest merits of doing forex is

‘there are a lot of chances to make money more than any other financial market’.

If I talk about the stock market, generally you need to wait for when the stock price is ready to rise up in order to make profits. 
 
Even if the price is going down and down because of the economic recession or other reasons, all you have to do is just ‘wait’ and pass through the downtrend.
 
But when it comes to forex trading, you can make profits at uptrend market and also downtrend market as well!
 
The reason why you can make profits even in a downtrend is 
 
“In forex trading, it is possible to sell a currency which you actually don’t own, and also you can buy it back later. “
 
Sound’s pretty strange, right?
 
If you are still newer at Forex market, it is a little bit confusing like “How can I sell the currency which I don’t have…?”, 
 
Well…just know it is what it is. Don’t think deeply lol
 

 

④ Basic trading terms you need to know before trading

 

In this article, I have collected all basic trading terms which all beginner traders have to know before starting trading!
 
 
 
 
 
 

           

I'm glad if you share this article!Thank you.

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