Get to know Foreign Exchange Transactions
Over a period of years, foreign exchange transactions were considered a high-risk business that needed huge capital. What is foreign exchange actually and why is this business so lucrative?
What are Foreign Exchange / Forex Trading Transactions?
Forex (Foreign Exchange) or better known as Forex (Foreign Exchange) is one of the largest forms of financial markets in the world. Forex reaches trading volume in excess of $ 1.6 trillion or IDR 16 trillion every day. Then, what is traded on forex / foreign exchange ? Of course money. Details, currencies are traded in pairs through brokers or dealers, for example: USD vs. Euro, Poundsterling vs. Yen, and so on.
Forex is different from the stock market, the foreign exchange market does not have a central office such as the Jakarta Stock Exchange. The forex market is ” interbank ” or over the counter . Forex trading time runs according to the time in each country, in other words the forex market is open 24 hours.
Are currencies traded in the foreign exchange transaction market?
All currencies can be traded on foreign exchange, but there are several currencies that are popular and become the drivers of the world economy. These currencies are USD (Dollar, United State), EUR (Euro members), JPY (Japan, Yen), GBP (Great Britain, Sterling), CAD (Canada, Dollar), AUD (Australia, Dollar). Currency symbols are always three digits, the first two digits are the name of the country, and the third digit is the name of the currency of their country. For example: IDR (Indonesia, Rupiah).
To get to know the foreign exchange market, see 6 questions, and the answers to open your horizons about the forex market.
1. Who is involved in the forex market?
Participants in the forex market are government, central banks, commercial banks, non-financial companies, individuals or investors, brokers, and speculators.
2. Why do we transact on the forex market?
There is a big advantage in the forex market, but not for all investors. Forex market is a very liquid market, meaning that the results of the transaction can be immediately cashed. The forex market is open 24 x 7, 24 hours a day, 7 days a week. This allows you to transact flexibly, according to your free time. Especially for those of you who are still working and making forex traders as a second business.
3. Where is the place for safe and profitable transactions?
In the forex market (foreign exchange) people can buy or sell traded currencies.Objectively is to get profit or profit from the position of the transaction you are doing. In the Forex market, the terms Lot and Pip are known. 1 Lot of value is $ 100,000 and 1 pip is $ 10. While the value of the dollar in the forex market is different from the value of the dollar that we know in banks.
4. What method do we transact?
The method we use after choosing a currency is entry and exit signals, as well as the right trading strategies. New traders are very passionate, they try various new strategies and struggle to take advantage in every market condition. Maybe this brings you to big profits or losses. Therefore, there is no need to force yourself every day to trade forex.
5. When is the best time to transact?
The forex market is open 24 hours a day, but that does not mean the forex market is always active. As a trader, you will benefit from an active market (moving up or down). As a trader, you must be able to recognize the best times to transact.
The forex market is divided into 3, namely the Asian (Tokyo) session, the European session (London), and the USA session. Always keep in mind that the timelines are EST (American Time East) and GMT (Greenwich Mean Time – London time)
6. How do we know our strengths and weaknesses before transacting?
A trader must know his strengths and weaknesses. You must know when to take profit and when to hold back from loss profit. The key to transacting is hard work, smart work. Don’t think superficially that the forex market is a gold mine that is easily explored. Only those who want to learn and are disciplined can succeed.