Know Forex Trading
Posting knowing forex trading will explain a little about the comparison of the forex market with other markets such as the stock market. And before you can trade forex traders really need to know in advance about forex trading itself starting from the symbol (code) , delivery of offers ( Quote ) and the mechanism of action.
When you buy or sell a company ‘s stock, a quote will be displayed on the stock market, with company symbols, buy / bid prices and sell offer. For example, if you want to buy shares of Astra International Tbk, then on the stock market will be shown a quote (Quote) ASII Buy / Bid 6.025 Sell / Offer 6.050 or more clearly see the picture below.
When you buy or sell ASII shares using the Indonesian currency, namely Rupiah (code: IDR), the transaction can be written ASII / IDR ( Bid / Buy ASII / IDR: 6.025 Offer /II ASII / IDR: 6.050 ) and we can see that the price Stocks on the stock market are all in integers without any commas.
So the ASII / IDR: 6,050 code means that you can buy ASII shares using the Indonesian currency, namely IDR Rp. 6,050, –
Similarly, in the forex market, quote information also occurs, for example, when you want to sell a Euro currency (EUR) to get a dollar (USD), the pair of codes used is Sell EUR / USD or when you want to buy Euro currency ( EUR) using dollar (USD), the pair of codes used is Buy EUR / USD.
In the forex market there are several types of currency pairs traded, including Direct Pair, Indirect Rates Pair, and Cross Pair. Direct Pair is a currency pair that ends in USD such as EUR / USD, GBP / USD, AUD / USD, and NZD / USD while the Indirect Rates Pair is a currency pair that initially is USD such as USD / JPY, USD / CHF, and USD / The last CAD is Cross Pair is a currency pair that does not contain USD such as EUR / JPY, GBP / JPY, AUD / JPY, EUR / GBP, and GBP / CHF.
When you buy a house in America it will usually display a price quote up to 2 digits behind the comma for example $ 98,290.39 but in the forex market the offer is delivered more accurately, namely the 5 digit number behind the comma, for example Buy EUR / USD 1.27218.
One to three digits in front of the same when we will buy goods in America as usual which we will meet in the case above means we buy 1 (one) Euro with 1 Dollar 27 cents. Then the next 2 digits are called Pips or stands for percentage in points . Or we can say that we buy one Euro with 1 dollar, 27 cents, and 21 pips or 21 / 100s cents. Or offers (Quote) can be written One Dollar, 27 Cents, and 21 Pips.
And the last digit is called Fractional Pips but some forex brokers don’t sell it. Fractional Pips or equivalent to one-tenth of a pips so that the offer value (Quote) becomes One Dollar, 27 Cents, 21 Pips, and 8 / 10th Pips. The following is an example of a quote board (Quote) price of the Direct Pair AUD / USD pair.
There are other important factors in the forex market, namely Leverage , if you have $ 10,000 with leverage 100 then you can trade up to $ 1,000,000 or if you have a profit of 0.25% then you can change the profit to 25%. How are you interested?
Even though there is leverage that can be used to increase profits if we cannot use it wisely, it can result in loss or loss of capital. And this leverage factor you will not find when trading stocks. How do you understand right?