Summary Tips For Best Traders..
The simple definition of FOREX is buying and selling (trading) of currencies at market prices. The term FOREX is actually the combination of two words "FOReign EXchange".
There is actually a group of banks that formulates FOREX financial market. This group of banks actually buys and sells currencies on daily basis during five business days a week, and the daily turn-over of their trades is more than three billion dollars.
Generally, people misunderstand the FOREX market and mix it up with an exchange. But in fact, this concept is not true because this financial market does not have any physical address like New York Stock Exchange or London Stock Exchange. The trades in FOREX financial market are conducted 24 hours a day (five days a week), so you can always trade your favorite currencies.
Traders have the option to trade through FOREX trading terminal, some specifically build software and even over the telephone. This is absolutely great advantage for those who have the ability to earn money through trading currencies, because all you need is a computer with an Internet connection and appropriate software. Since FOREX is a 24-hour market, so you can work from anywhere in the world, any time of the day five days a week.
Forex market should be treated same as any other market in our practical life: e.g. stock market, commodity market or even the simple market in your area. All of these markets are different in goods offered but have the similar features. The methods of making any deal are also different in all markets.
This is very obvious that the product offers in FOREX market is foreign exchange currency because this is particularly a currency market. Being a FOREX trader, you just need to focus on buying any currency at a cheaper rate, wait for your target rate and then, sell it at comparatively more expensive rates. This rate difference between buying and selling is actually your profit.
You can even earn your profit by reversing this method. For example, knowing that any currency pair should go more in downward trend, you sell it in the current expensive price and buy it when it comes back to some cheaper price. The price difference in this example is also your profit.
FOREX Trading is No Big Deal:
Initially, it could be difficult for everyone to make money in FOREX trading or understand how and when to trade? In fact, FOREX trading is relatively easier way to earn money than other financial markets and trading in FOREX is no big deal at all. There are a few necessary steps to keep in mind to make money in FOREX market.
First of all open your live account with Rexor Investments, download our white-labeled MT4 trading platform (a special software that allows you to trade in real time) and install. To learn, you can open a demo account and practice a few days until you are comfortable to play live account. This demo account helps you a lot in sharpen your trading skills. But the Live Account is the only place that makes you real money.
Just Give One Minute to Below Example:
This is generally a big question for FOREX newbies that how they can earn through exchange rates differences. Well, consider this example to understand - how you can through FOREX trading. Assuming you have already opened your live trading account of $100 with Rexor Investments, you chose to trade in EURUSD currency pair. Now you need to set lower and upper limit on the chart and decide a trade or buy or sell. Well, you assumed on February 10 that the price of the this pair will rise in coming hours or days and you buy 1 lot of 10,000 EURUSD for 1.3580, making a deal of 10000*1.3580 = USD 13,580. Different levels of your live trading account actually allow you to trade 100 times of the real money in your account. The exchange rate EURUSD rises the next day to 1.3650 and then you decided to sell the already purchased lot of 10,000 EUROS, making a deal of 10000*1.3650 = USD 13,650. The difference of these two amounts (13650 - 13580) is actually your profit (USD 70).
Amount Require to Start FOREX Trading:
You do not need a big amount of money to start trading in this financial market which actually is considered most often. Thanks to level that is offered by Rexor Investments, you can trade 100s of times of the money actually existed in your trading account. For example, you have $100 in your account. It allows you to make a deal of more than $5,000 at once.
The most recent past decade brought a visible boom to the online forex trading and this type of financial market has become very popular among traders because this financial market is equipped with several advantages:
24-Hour Income Opportunity
Forex trading is a 24-hour income opportunity because it is alive during different business hours of the different countries. Therefore, you get an opportunity to trade in this global financial market at any time of the day 5 days a week. Forex trading does not have any particularly set exchange hours. So you can assume that there is something happening in any part of the world at any time during 24 hours.
Make Profit with Buy or Sell
The other very significant income opportunity of the Forex trading market is that it does not impose any limitations on shorting currencies. Unlike many other financial markets, where one can not easily sell short, Forex market allows its traders to go with the wind. If you think that technical and fundamental analysis show that currency will fall, you can easily sell any currency pair. Likewise, you can buy any currency pair if you think it will go up. It clearly means that making (or losing) money opportunity in Forex market is available 24-hour a day.
Minimal TRADING COSTS
Rexor Investments does not change any commission on any Forex trading account with us. You do not need to pay any expensive exchange fees to trade in Forex. You only pay the spread difference you see between buy and sell price on any currency pair. This is the only commission / fee you pay to trade with Rexor Investments and there are no hidden costs at all.
Ease of Trading
You probably are aware of the fact that Forex trading is the most liquid trading market in the world with $4 trillion a day turnover. Traders from all over the world mostly trade in some popular currency pairs only. So it becomes (even for newcomers) very easy to get involved in any currency pair at any time of the day and close their trades easily even with large sizes.
High LEVERAGE Facility
Every Forex trader is given an opportunity to trade with considerable high leverage. At Rexor Investments, you get maximum 1:500 leverage option. This high level of leverage facility enables you making good profit from the market even with small moves. But this facility can work both ways, means you have equal chances of increasing your losses as well.
Global Trading Market
With the continuous development and enhancement in internet technology, the world has become more global. So the traders tend to search more and more investment opportunities online. If you also want to generate profit from investing in another country online, buying / selling in Forex market is more accurate option for you. It gives you more global earning exposure.
The simplest definition of leverage and margin is that the extra money which any broker gives you to trade currencies is named as margin and leverage. The leverage and margin significantly increases the profit and loss chances by increasing your trading power. The leverage and margin is actually the money which you get in addition to the actual deposit you have in your account. Deep understanding of leverage and margin is a must, before you use them for trading because the use of leverage and margin also increases your risk.
Increases Chances of Profit & Loss
Basically, the only aim of trading using margin and leverage is nothing but to magnify the chances of earning profit by taking larger trading positions then originally you can with your account deposit alone. However, the other important side of this amazing facility is that it equally increases your risk. There are chances of losing more than your initial stake.
How Leverage and Margin Works for you
Before you use the leverage and margin offered by the broker, you have to deposit a required percentage of the leverage and margin into your trading account. To understand what we actually want to make you understand, please go through the example below:
We suppose that you have opened your trading account Rexor Investments and there is USD 1,000 in your account as initial deposit. You want to trade USDJPY currency pair with the leverage 1:5. It means this leverage facility provided by Rexor Investments, let you invest in USDJPY currency pair 100 times of the value of initial deposit in your account i.e. USD 100,000.
Yes, with leverage 1:100, 1,000 USD in your account can be enough to trade with a value of 100,000 USD as well. Maximum leverage provided by Rexor Investments is 1:500. You just need to maintain the minimum deposit in to your account to hold this position because this minimum deposit works as the required margin for this trade.
Be 100% Sure About the Risks
Proper usage of the offered leverage in to your trading account is a must. You must understand that you should be careful while opening any position using increased leverage because at some point it may convert into an over-leverage position, and then you will be required to increase your deposit in to your account. This high level of leverage facility enables you making good profit from the market even with small moves. But this facility can work both ways, means you have equal chances of increasing your losses as well.
If you want to change / expand the settlement date of any of your opened trading positions, the process is simply named as rollover or swapping. The delivery of most the currency pairs trading is required to take two days after the transaction date of that currency pair. However, the settlement period of any opened position is actually artificially extended by one day. You agree to close your opened position at the closing rate of the market of that particular day and open it again on the opening rate of the next day.
Rexor Investments also offers rollover / swap option to it clients. We also offer rolling spot forex. In general, all your trades does not involve physical delivery of any currency pair you traded with any broker. Therefore, all of your opened currency positions will be automatically rolled over (carry forwarded) to new value date. This process also involves swap charges or credit. You can get complete details on swap charges in our rollover/interest policy page.
The interest rate differential of the two involved currencies in your trade, becomes the base of calculating the rollover cost / swap charges. The interest rates in the USA and EU are 4.5% (per annum) and 5.25% (per annum) respectively. Every trade you make by involving one of these currencies will make situation like this - borrowing one currency allows buying other. For example; you open a buy position for EURUSD with 1 lot size, it means you borrow USDs for 4.5% (per annum) and earn profit on Euros for 5.24%.
Detailed Explanation:
If you have an ask (also commonly known as buying) position and the other currency in the pair you are trading has a lower overnight interest rate than the first currency of your pair, then you generally get a gain.
If you have a bid (also commonly known as selling) position and the other currency in the pair you are trading has a lower overnight interest rate than the first currency of your pair, then you generally lose the difference.
If you have opened a buy (also named as asking price) position and the other currency in the pair you are trading has a higher overnight interest rate than the first currency of your pair, then you generally lose the difference.
If you have opened a bid position (also known commonly as sell position) and the other currency in the pair you are trading has a higher overnight interest rate than the first currency in of your pair, then you generally get a gain.
If you have a bid (also commonly known as selling) position and the other currency in the pair you are trading has a lower overnight interest rate than the first currency of your pair, then you generally lose the difference.
If you have opened a buy (also named as asking price) position and the other currency in the pair you are trading has a higher overnight interest rate than the first currency of your pair, then you generally lose the difference.
If you have opened a bid position (also known commonly as sell position) and the other currency in the pair you are trading has a higher overnight interest rate than the first currency in of your pair, then you generally get a gain.
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