Foreign Exchange Market (FOREX or FX) is a set of operations related to the purchase of one foreign currency for other. The exchange rate is the price of a monetary unit of a state, expressed in monetary units of another state, when concluding a purchase contract. This price can be determined by the ratio of demand and offer of a certain currency in the conditions of the free market. In the currency market, price formation has a global character, investors from all over the world concurrently conclude contracts through primarily brokerage platforms.
FOREX trade is done in pairs, each pair consists of the currency of two different countries. In order to earn a profit by trading currencies, you need to buy the currency whose value is rising, against the currency whose value falls. Likewise, if you estimate that a currency value will fall, then you need to sell that currency to someone else that you think will increase your value.
How to choose forex brokers
There are a lot of brokers on the internet so you need to be carefull and pay attention while choosing them. If you are interested in best forex brokers in south africa maybe we can help… Each broker offers something more or less than the other, find yourself a broker who is, first and foremost, reliable in terms of payment and repayment, a broker that matches the strategy with which you access the aggressive FOREX market etc.
Before you start trading on the foreign exchange market, you need to open an account with a broker. A broker is an individual or company that executes orders according to the client’s or trader’s decision. Brokers earn through commission or fee for their services, that is, the difference between the purchase and the selling price. As a matter of fact, the broker is our access point for entering the world’s largest stock market, i.e. FOREX.
No commission, no mediators…
By trading on FOREX you do not have to pay commissions, stock exchanges, to the state or even a broker. Brokers have compensation for their services through something called the difference between supply and demand, i.e. buying and selling prices, the so-called spread. Foreign exchange trading eliminates intermediaries and allows you to trade yourself on the market.
On the Forex market, you determine your account size yourself. This allows merchants to participate in the market with accounts of at least $ 100 with most brokers, even though they have brokers with a minimum stake of even $ 1! The usual transaction costs (difference between buy / sell) is usually less than 0.1% under normal market conditions. With larger brokers it can be lower, about 0.07%.
The market opens on Sunday at 23.00 and closes on Friday at 22.00, but it is a variable opening and closing, all depending from one broker to the other. It’s great for those people who want to trade in your spare time, because you can choose when to trade – in the morning, afternoon or at night.