The foreign exchange, currency trading, forex, or FX market is the fastest-growing market in the world. According to Alan Safahi, an experienced Forex trader, a professional entrepreneur, and the founder of a startup company in San Francisco, the daily turnover of the forex market is more than $2.5 trillion.
Safahi’s
research shows that participation in the forex market is central banks,
commercial banks, corporations, hedge funds, institutional investors,
and private individuals like you. “Goods” in the forex market are
currencies of different countries. You can buy U.S dollars with Euro, or
you may sell Australian dollars for Japanese Yen.
Forex? What Is It, Anyway?
The
primary advantage of forex trading is “leverage,” the ratio of
investments to actual values. For example, using a $1,000 to purchase an
FX contract with a $100,000 value means leveraging at 1:100 ratio. Alan
Safahi Orinda says that the $1,000 is the amount of money you invest
and risk. However, the profits you make are many times greater.
How Does One Profit In The Forex Market?
The general rule of thumb, according to Alan Safahi,
is “buy low and sell high” to profit in the forex market. The potential
of profit comes from changes or fluctuations in the foreign exchange
market.
The stock market requires traders to purchase shares, but
forex trading does not work this way. It does not require the physical
purchase of a currency or currency pairs. It involves contracts for
amount and rate of exchange for currency pairs.
How Risky Is
Forex Trading?According to Alan Safahi’s research, traders can lose more
than their initial investments, also known as the “Margin.” Although
you can make unlimited profits, you will never lose more than the margin
in the forex market. However, Safahi advises not to risk more than you
can afford to lose.
How Do You Start Trading?
You
can start forex trading by using different trading platforms. It is
crucial to register and deposit the amount you want into your account.
Remember, this is your investment. Ensure you register with a reputable
platform that accepts payments through PayPal, Western Union, and all
major credit cards.
You will start trading after the trading
platform receives your deposit. Some FX trading platform offers
operations online, anywhere, and anytime. It means you will have
complete control and management options to monitor your trading
activities. Likewise, you can check different scenarios, change terms in
your deals, close deals, and withdraw profits.
What Are Components Of A Forex Deal?
Alan
Safahi’s research highlights that a forex deal is a contract between
the market-maker and the trader. The contract is composed of the
following key components:
● The currency pairs
● The principal amount
● The Rate
● Time Frame
● Spreads
● Margins
● Margin Level
● Leverage
● Risks
Final Words
Forex
trading is a massive topic, and we can discuss it for days and months.
However, this is a quick guide that gives some basic information to
beginners. Remember, forex trading is an enormous liquid market,
allowing people to trade a wide range of currencies. Because it is a
volatile market, you can avail numerous profit opportunities.
It
is crucial to study the forex market in detail before you start trading.
You can read other blog posts on our website to learn about forex
trading and benefit from Alan Safahi’s in-depth knowledge that he shares
with his readers.
Originally Posted: https://alansafahi.weebly.com/blog/a-quick-guide-to-forex-trading
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