A prospective Forex trader must not only understand what Forex is, but must also be able to know between Forex and money exchange.
What is the relationship between Forex and the money market and how is Forex different from the stock market?
Forex with financial markets is two things that seem separate but are actually very related. For more details, will be discussed below
Forex is very close to exchanging money. Exchange of money is an exchange of foreign money. It’s just that the money changers do physical buying and selling of foreign currencies, money changers have a place and goods, in this case, is the money being traded. While Forex transactions are carried out by transferring bank account funds between those who make transactions. It can be understood that a forex is a form of advancement from money exchange. Or it can also be said that money changers are a traditional form because they actually present physical money. Besides that, we also have to come to a certain place while forex is a renewal. That is where exchanges can be done in cyberspace without having to hold money physically and come directly to the exchange place.
With forex, exchanging foreign currencies is much easier and faster. Forex is a revolution in the money exchange business. The concept of forex business is also not much different. If the value of the dollar currency is down, you can buy it. When the dollar strengthens again, you sell it again.
Forex and money market
Financial markets are a mechanism by which funds can be borrowed or invested. Namely through short-term financial instruments usually not more than 1 year. The money market players are
First, commercial banks
In the banking test book, which is said to have a role as a financial intermediary, namely the party that holds the funds. Among other things in the form of demand deposits or demand deposits, time deposit savings, other loan and capital (equity). Then distribute it in the form of cash, credit, securities, other receivables, and fixed assets. Commercial banks operate in the money market to maintain liquidity and their ability to pay their obligations. Namely to channel or place funds (excess funds) in such away. In order to be able to generate maximum profits by considering liquidity and solvency and to obtain funds with minimal costs.
Second, the Central Bank
Central Bank Is a state institution that aims to manage the money supply to regulate interest rates. In addition to maintaining the availability of credit, and maintaining the exchange rate of the country’s currency against other currencies. The Central Bank issues monetary policy, namely central bank decisions to change domestic interest rates. Namely through an increase or decrease in the amount of money in circulation. Monetary policy can be directed to anticipate or deter speculators. Namely, speculators who can shake the stability of the foreign exchange market in particular and macroeconomics in general. The involvement of the central bank in the financial market is more conditioned to the economy to achieve macro Economic Goals.
Third, non-financial companies.
The financial manager of a non-financial company must at one-time act like a fund manager in the financial market. This is understandable because besides facing problems regarding how to maintain liquidity or cash inflows. In addition, the company must also think about how every penny of funds invested can produce a maximum return. In general, the purpose of non-financial companies operating in the money market is to obtain loans and to generate non-operating profits or interest earnings from investing funds in the money market.
Fourth, individuals, namely anyone who has financial instruments.
Financial instruments such as ATM cards Credit cards savings or bond deposits and even cash (currency) are money market participants. Such participation depends on their goal of holding the instruments, namely for the sale and purchase of commodities needed to guard against unexpected events. In addition to speculative investment that is expecting profits from changes or differences in interest rates.
The money market and foreign exchange market are conceptually different but actually the money market and foreign exchange market are interrelated and even integrated. The money market and foreign exchange market signal prices.
The price of a foreign exchange transaction is called the exchange rate or the exchange rate and the price of money market operations is called the interest rate. In other words, the money market indicator is interest and the foreign exchange market indicator is the exchange rate.
For example, borrowing dollars from the American money market, then converting them into Rupiahs on the foreign exchange market. After that, depositing it on the Rupiah money market, or borrowing Rupiah from the Indonesian money market, converts it into dollars on the foreign exchange market. Furthermore, depositing it in the dollar money market.
Forex and the stock market.
Some people who are unfamiliar with Forex and the stock market assume that they are 1 or the same. Indeed If viewed from a certain aspect there is indeed an element of equality but in principle different. In terms of opportunity, the theme of shares only has one Way opportunity so that when the market goes up the trader gets a profit whereas when the stock price goes down the trader loses. This is different from the Forex business which is a 2-way opportunity. When forex prices go down or up, Forex traders still have the opportunity to profit.
At Forex prices traders who make long (buy) will benefit. And vice versa when Forex prices go down, Forex traders who make short or sell will benefit. Ironically, unlike stock traders who suffered massive losses or went bankrupt during the Global Financial Crisis in 2008. In fact, many experienced huge profits. This proves that forex is an investment business that is not familiar with crises.
The best forex trading system
Lately with the increasing number of forest advertisements on the internet offered by Forex brokers making Forex terms more familiar. Forex is increasingly popular and is being discussed every day among business lovers and financial students. Although the term Forex is very familiar to their ears and often they see it in cyberspace. Not all people who understand and understand what Forex really looks like.
Forex trading is a market that promises high profits for those who are able to play cleverly in the market. As we have seen recently, transactions on the foreign exchange market have developed rapidly. People don’t just make the foreign exchange market a place for currency exchange. Or also to facilitate cooperation between buyers and sellers in the market. With the increasingly sophisticated technology, it is possible for anyone to participate in the pursuit of profit in the foreign exchange market. Technology also provides opportunities for individuals with limited financial or capital capabilities to be able to enjoy the sweetness of the foreign exchange market.
Forex transactions are as follows so that Forex trading is referred to as high-speed trading.
Transactions run quickly where it doesn’t just allow a trader to make a profit or get rich suddenly. But many also suffer losses or go bankrupt in the blink of an eye. Therefore one must understand Forex to the fullest with all its techniques and strategies. Whatever is done by someone must be based on established knowledge. In addition, you also need a tool to help you analyze foreign exchange movements. Professional traders and beginners, there are only one day can double the funds and some are overnight.
There are also many professional forex traders who suddenly go bankrupt, and there are also beginner traders who suddenly become rich just by using a proper trading system.
Forexsignal30 is the best forex trading system at the moment.
This system has been around since 2009 and has been used by professional traders all over the world. Forexsignal30 can give you strong signals to buy and sell right. This trading system gives signals on your MetaTrader, signals appear on time that consistently provides profits every day. If you use this system in a 4 hour or D1 time frame, then you can get 1 to 5 signals every day. We recommend that you install it on several currency pairs so that you get more signals every day. This design can facilitate your success in the field of Forex trading.
Indicators at Forexsignal30
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