First of all, ask ourselves are: what is forex?
Forex is the nickname given to the universal exchange market on which currencies are traded against each other to exchange rates that vary continuously. This word is a contraction of the words Foreign Exchange. It is the market where you can, for example, buy U.S. dollars (USD) with your euros (EUR) and vice versa.
This market, global in nature, is the second largest financial market in the world in terms of overall volume, behind the interest rate. Every day in this market, are exchanged phenomenal volumes of currency (in 2007, an average of 3 210 billion U.S. dollar was exchanged daily, and that number is climbing).
A market that is no longer limited to banks
The main actors are, of course, banks, around which passes the vast majority of currency exchange:
- Over 40% of trade is conducted between banks
- Over 40% also between banks and nonbank financial institutions
- Over 17% between banks and non-financial businesses
- The small remainder representing individuals (very few), who now have access to this market can be more lucrative than
The USD as a global hub
Despite the strong development of the euro, the dollar remains the dominant pivot, present in 89% of transactions (37% against the euro, the yen 20% and 17% for the pound sterling, all on a total of 200% since each transaction involves two currencies).
For a non-European currency XXX, a transaction between the euro and the currency is generally broken down into a transaction EUR / USD and USD transaction / XXX. The currency pair EUR / XXX is then called a cross.
Trading in general
Forex is the foreign exchange market, but there are others that you can invest: gold, copper, oil, etc.. in the form of CFD (contract for difference), stating that the difference in value of financial instruments between the time the contract is opened and the time the contract is closed, will be credited or debited from your account.
In fact, it's like the stock market, you take a position on a given value (current price of a share / current market price of the dollar / current price of oil) by buying a certain amount, then the market will evolve ( in one way or the other) and you save is a benefit if the price has changed in your favor, or a loss if not (which is normal, as will be seen immediately).
Possible benefits
Indeed, we must know that the financial markets, we can not win every time: a good trader earns an average of 6 out of 10 positions, and it is sufficient to raise a lot of money.
Losses are part of the "game" and it is normal to meet: just because you earn six positions after that you are an excellent trader, or because you lose 6 to after that you're a bad trader! These are things that happen ...
The key is to focus on the long term: this is where you will win
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