Actually, the Forex way of working is very simple, buying the index at current currency and sell it in the future (1 hour, 1 day, week or year) and could also sell the currency at current prices in the future. But often the prospective customer to the broker asked “how Forex works”? As a novice broker I often see questions like this.
If you are working Forex and get basic questions like, my usual first explain theoretically, in accordance with the Forex basic sciences, and as a result did you know my explanation is almost never a client who wants me as a Forex investment through their brokers.
How does Forex work so that it can be a steady income? In fact if we analogy to the world of Forex trading Forex trading business then it is tantamount to selling. Suppose we are a car dealer, in the morning we bought the car at a price $50, due to some conditions, the price of the car goes up in the afternoon or evening. That means we get multiple benefits in a matter of hours.
So is the Forex, in the morning when it opened a new dollar price against JPY (USD – JPY) and we suppose 99.36 JPY to the dollar purchases. Turns out the next two hours USD – JPY turned into 99.86 and we sell JPY which we bought two hours ago. This means we get a profit of 0:50 in just two hours. 0:50 are commonly referred to as 50 points (PIP) in Forex trading.
Then, do you already understand the meaning of investment in Forex? Consider it is an investment step that invests capital will make it thrive. The types of investments vary, including real investment and financial investment or monetary investments. For real investment, this investment is usually intangible property, livestock, and agriculture and in contrast to monetary investments, such as investments Forex and Foreign Exchange.
Understanding of their own Forex investment is an investment that requires a strategy to take advantage of fluctuations in currency exchange rates between countries in the financial markets. Examples of Forex investment itself are the exchange rate to the dollar lately often goes up and down. With the exchange rate was unstable, the investor or trader often called taking advantage.
The workings of the Forex investment itself is almost the same as other investments, we bought an investment at a cheap price then when the price is high then we can benefit by selling it. To be able to enter into a kind of investment, you first need to know the mechanism.
If you do not want the capital and later the results you get lost, is very important to know in advance how the Forex investment and knowledge about the legality of an investment firm concerned with this one.
So you do not necessarily trick or trapped by scammers and Forex capital and profits disappear. Many say if the workings of the Forex investing are like gambling in the form of trade. For that, you should be careful in knowing the legality of Forex trading company you seek.
Then you have to understand how the Forex investing seems easy but it is difficult as well. Inside the workings of Forex investment, there are two parties involved, namely the seller and the buyer. But the two did not meet in person, but rather an investment or to trade in the stock exchange is mediated by the broker as an institution arbitrage.
Prices rise and fall can be directly monitored from the market which of course simplifies this investment mechanism. Later, transactions made by investors will be accommodated by a broker who then forwarded to the exchanges on which this is the place to meet and transact which will involve sellers and buyers.