Forex Trading: Speculative Operations Part 2

By in Intro to Forex on November 20, 2020

“Ticket of admission” in community of currency speculators can be acquired today on distress prices. Some companies agree to serve the clients having only one hundred of dollars. However with such sum it is really possible to count on profit only being assured of the absolute luck. The most acceptable minimum starting deposit considers today $2000 and a transaction minimum amount – 100 thousand units of base currency. Such conditions allow risking in the transaction only half of deposited amount.

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Currency pairs act as the object of trading. That is why you will have to choose a currency pair for yourself. The most popular are EUR/USD (euro/dollar), JPY/USD (yen / dollar), and GBP/USD (the British pound/dollar). At opening of a so-called long position on euro against dollar you count that the common European currency rate in relation to the American will grow. In a return case, your position will be called as short.

We will admit, you have opened a long position on EUR/USD at the price of 1,1000. Very good news from Europe (or extremely negative of the USA) have during the day come, and the euro exchange rate has risen to 1,1234. Its growth has constituted 2,13 %. However, if you have enclosed $2000 and have made the transaction on 100 thousand euro, your day profit will constitute 117 % – besides without overhead costs.

Costs at trade in currency in the forex market in the majority of the companies are expressed today in so-called spreads. The spread is a difference between a rate of purchasing and sale of one currency against another, established by your broker or bank. In other words, it is the commission of your intermediary. At servicing of your transactions it underestimates the price of purchasing simply a little and overestimates the price of sale of currency.
Spread of the broker on EUR/USD can make 3-5 “pips” (the fourth sign after a comma in the quotation, for example 0,03 cents from each dollar), and on GBP/CHF (the British pound / the Swiss franc) – 10 “pips”.

To achieve success in currency trading it is much more difficult, than completely to lose laid-down capital. Therefore to start trading forex with the sum from sale of your apartment, car or a summer residence is destiny of the very risky people. To begin with it is necessary to re-read the special literature devoted to elements of trade. Many books on this theme are written by absolutely “national” languages. Besides, brokerage services in training today render trade in the exchange market. The fortnight rates including the theory and a practical training, will manage to the pupil on the average approximately in $100. After reception of initial knowledge it is possible to pass training in the train mode as much as possible approached to “fighting”, without using of real money funds.

People who took the decision to participate in forex trading should start from learning the basics of currency exchange market to make sure you do not experience problems with this industry.

There is another option – you can hire experienced traders to managed your trading account – read more about forex investment here. Also make sure to look for the knowledge in a good forex book.

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