Benefits Of Forex Trading And How It Works – Forex trading is a type of investment instrument that uses foreign exchange or foreign exchange which is abbreviated as forex. This Forex uses physical currencies which means you actually hold the dollars or other currency being purchased.
But now there is also forex trading through online so that it is easier and more flexible to do. This investment is also known as forex trading with the aim of making a profit.
Where usually one party will buy a certain nominal amount of currency to get the difference in profits. Those who trade forex are certainly experienced and always take the time to see and analyze the various factors that affect fluctuations in world currencies.
Talking about investment, of course there are lots of instruments to choose from, one of which is forex trading. Talking about forex trading, this instrument is quite risky but the benefits are also great.
Benefits Of Forex And How It Works Trading
Forex is actually a form of investment where you buy a foreign currency or foreign currency and expect the value of the purchased currency to increase.
For example, when you buy dollars with a value of Rp. 10 thousand and currently the total dollar is Rp. 14 thousand, then the profit you get is Rp. 4000.
In essence, this forex trading must involve certain currency pairs and can be traded according to certain conditions to achieve maximum profit results.
How It Works?
In developed countries such as America, Canada, England, the Netherlands, Germany, Australia, and Italy, young people have liked it so that every time they meet, they talk about the forex trading business.
Shortage and Benefit Trading
There are advantages and disadvantages to investing in forex, of course, considering that all types of investments have their advantages and disadvantages. Therefore, let’s discuss it in more detail.
Benefits from Exchange Rate Differences. The advantage that investors get is the difference in the exchange rate when buying with the current exchange rate.
You can do this by buying dollars when they are still low and reselling them at a higher price or buying at a high price and reselling them at a higher price.
While the movement of the dollar there are three possibilities, namely an uptrend or an uptrend, fixed or sideways and a downtrend or a downtrend.
If it goes up, you will make a big profit, but if it goes down, the value of the currency will tend to fall as well. Before making a dollar investment, you should first know the purpose of this investment.
Also make sure that before starting forex trading, you also have provided an emergency fund that can be used for something that happens suddenly and suddenly.
Transactions can be done flexibly
There are so many advantages of forex, one of which is that fund transactions can be done 24 hours a day. This is clearly different and different from transactions that may occur in the capital market because the forex market will be active 24 hours, five days a week so you can make any transactions. But make sure if you want to buy foreign currency, please note that each country has a different opening schedule.
In addition, there are also dealers or brokers in the foreign exchange market, making the market more liquid and prices will remain stable. Therefore, traders can close and open their positions fairly at the market price.
No Additional Fee
Actually there are no transaction fees in the online forex market, it’s just that there are some fees that vary in number, for example the cost of withdrawing funds from a forex account.
The benefits can be felt immediately
Another advantage that traders can get is that they can take advantage of price increases that come from the difference between the purchase price and the selling price on the buy order.
Meanwhile, at the time of making a sale, the profit will be obtained from the difference between the selling price and the purchase price or the closing price.
Have a Margin System
In addition, there are trades that use a margin system, where this can make the purchasing power of investors higher than the capital they have.
If it’s like this, of course the profits are both ways when the market goes up and the price goes down. Of course, this may not apply to other types of investments such as stocks.
Forex ups and downs
It should be noted that every investment has its drawbacks, including foreign exchange. The first weakness of this investment is the effect of fluctuations in foreign exchange rates.
As is well known if the rupiah currency can become very weak so it can even be risky to buy dollars because of course the price is expensive. Waiting for the strengthening of the Indonesian currency can take time, so it can make forex trading suffer losses.
Home Country Government Currency Intervention
Another risk is interference from the government of origin whose currency is traded in the forex market. The intervention in question is the intervention of the country’s central bank by raising interest rates, releasing bonds from the government and buying foreign exchange on a large scale.
By knowing the pluses and minuses of forex investment, then you choose the type of investment that suits your abilities and funding needs, both for short-term and long-term investments.
Recommended Sites for Forex Trading
There are so many forex sites that are often used as references for investors to find out various things about market movements, the economy and so on.
In addition, with this forex news, business people can perform fundamental analysis before placing an order or opening a buy or sell position. Fundamental analysis is very important for traders so that profits will increase. Whatever?
Bloomberg is a business portal, where all business related information is available here. You can find, ranging from forex or foreign currency, currency or currency movements including rupiah, commodities, futures and stocks. By looking at Bloomberg, you will know the development of the economy.
- Forex Factory
In addition, you can also see the forex factory site that is the choice of traders. As the name suggests, this site provides various information about forex fundamentals as well as technicals.
Not only that, this site will also publish a live economic calendar every day to provide information about forex trading. The economic calendar provided by Forex Factory will be a reference for traders, to know the changes in each world currency.
In addition, there is also a dailyFX site which is almost the same as the forex factory, only the difference is that there is analysis from forex experts including forex signals.
There is also another forex site called XE, where a lot of news about currency sites is available in full with detailed reviews, making it easier for traders to analyze various kinds of forex fundamentals.
- Yahoo Finance
When talking about the most favorite forex trading site and can always be accessed easily is yahoo finance. This site is often used by traders and investment experts to pay attention to forex trading news.
This site always updates and updates information about currencies quickly, so that it is visited by many ordinary people and business people.
- Financial Time
Next up is the Financial Times which presents the most up-to-date information in the world of forex trading. One of its advantages is the more neutral nature of reporting, as this site is not owned by the United States government.
The Financial Times also allocates greater space for forex trading in developing countries, including the Asian region, especially regarding world-class currencies. So, the information that traders will get is not only focused on the main currency.
The next site that is a favorite of traders is CNBC. This information portal also allocates a large enough portion to contain the latest information about the world of forex trading.
In fact, traders can access it at any time, because news is available 24 hours a day. After knowing several sites that are references for forex trading, you can be wiser in conducting fundamental and technical analysis.
Doing forex trading can not be arbitrary, because the risks are fairly large. So, before jumping in, you must really understand and understand how it works and its intricacies to get maximum profit.