Forex Trading Concepts
Often we hear FOREX TRADING and many people talk about it. Is this an investment or an ordinary trading (trading)? How to trade forex and what is obtained from forex trading? Viewed from the language side, FOREX TRADING has 2 words namely TRADING and FOREX.
Trading, can be interpreted as trading activity or buying and selling and Forex, is a currency as a trade object. Forex trading is defined as trading activity to buy and sell currency.
However there is a unique of forex trading if we refer to alternative trading system (SPA). That is how the trading is done online and done by parties concerned about the currency and fluctuations. Forex trading parties with SPA (online) tend to seek profit from currency fluctuations.
Of course currency fluctuations are not solely due to SPAs, but also by currency trading in real terms because of the need, such as paying off foreign debt by governments and employers, traveling abroad, students who want to study abroad and more.
So, forex trading that we often talk about is trading activity buying and selling currency that aims to seek profit from price fluctuations or the difference between the selling and buying price. Parties who do this forex trading is us (as clients), forex brokers (as dealer transactions) and liquidity providers (liquidity providers). All done online and the buying and selling transactions that occur are included in the recording / statement sales.
As with the concept of trade, we will benefit if the purchase price is lower than the selling price and vice versa, we suffer losses if the purchase price is higher than the selling price. In order to get the result of buying transactions then we are required to conduct transactions and vice versa, if the sale transaction that we do first then we must close (liquidation / close) with the purchase transaction.
P / L = Selling Price – Purchase Price
Profit / Fortunately if P / L> 0
Loss / Loss if P / L <
Once we understand the basic concepts of forex trading, then we know what we will do next.