What are the benefits of forex trading?
As with binary options and CFDs, currency investment is very attractive because of the great potential for profitability. Certainly
a high potential profitability has associated a high risk, but the
forex investors continue to increase, because the risk can be easily
managed with stops, diversification and good pre-investment analysis. In addition, trading in forex has other interesting advantages:
It is a market that always has an opportunity. There is always some currency that is about to rise or fall in a high proportion with respect to another.
It allows to operate upwards and downwards, so that the possibilities of risk coverage are also important if you invest in other types of assets.
It is a market that is active 24 hours a day. Unlike the stock exchanges, whose markets have a few opening and closing hours, currencies are always active.
Low commissions. Unlike commissions to invest in stocks and ETFs, in forex the price of the transaction is only the spread between the purchase price and the sale price.
Great capacity for geographic diversification.
It can be traded with leverage.
There is always liquidity.Forex Fundamentals
The first time an investor sets out to trade with forex, he has to deal with a specific nomenclature. It is not very difficult, but at first it can be confusing. Here is a short summary of concepts that you will find when you are ready to invest in currency pairs.PipPut simply, a pip is the minimum part of a currency that can undergo a variation. The price of foreign exchange is very sensitive and in the financial markets is not limited to the two decimals that we are accustomed to use on a day to day basis. With regard to the investment, one euro with fifty cents instead of writing like this: 1.50, it would write like this: 1.5000. The quantitative difference is nothing, but to invest yes that it makes a great difference, since the variation of that fourth decimal can take a lot of money. The pip is precisely the last decimal that is taken into account when investing. That is, if the euro falls to 1.4800 it will have experienced a drop of 200 pips.LeverageLeverage refers to the possibility of trading with a large amount of money by simply buying or selling the option of buying or selling that interests us. In this way we can operate with more money than we actually have. If for example you use a leverage 1: 100, with 1000 € you will be operating with 100 000 €. So if the price of the currency goes up 3% you will earn 3000 € something which for an investment of 1000 € is not bad. The downside is that if it goes down, the losses move at the same rate.LotThis is the smallest transaction size allowed by the forex broker. If for example a broker fx operates with lots of 1000 units, this will be the minimum amount of currency units of a particular currency with which you can operate your customers.SpreadIt simply refers to the difference between buying and selling prices on the market.Criteria for evaluating a forex broker
It is a market that always has an opportunity. There is always some currency that is about to rise or fall in a high proportion with respect to another.
It allows to operate upwards and downwards, so that the possibilities of risk coverage are also important if you invest in other types of assets.
It is a market that is active 24 hours a day. Unlike the stock exchanges, whose markets have a few opening and closing hours, currencies are always active.
Low commissions. Unlike commissions to invest in stocks and ETFs, in forex the price of the transaction is only the spread between the purchase price and the sale price.
Great capacity for geographic diversification.
It can be traded with leverage.
There is always liquidity.Forex Fundamentals
The first time an investor sets out to trade with forex, he has to deal with a specific nomenclature. It is not very difficult, but at first it can be confusing. Here is a short summary of concepts that you will find when you are ready to invest in currency pairs.PipPut simply, a pip is the minimum part of a currency that can undergo a variation. The price of foreign exchange is very sensitive and in the financial markets is not limited to the two decimals that we are accustomed to use on a day to day basis. With regard to the investment, one euro with fifty cents instead of writing like this: 1.50, it would write like this: 1.5000. The quantitative difference is nothing, but to invest yes that it makes a great difference, since the variation of that fourth decimal can take a lot of money. The pip is precisely the last decimal that is taken into account when investing. That is, if the euro falls to 1.4800 it will have experienced a drop of 200 pips.LeverageLeverage refers to the possibility of trading with a large amount of money by simply buying or selling the option of buying or selling that interests us. In this way we can operate with more money than we actually have. If for example you use a leverage 1: 100, with 1000 € you will be operating with 100 000 €. So if the price of the currency goes up 3% you will earn 3000 € something which for an investment of 1000 € is not bad. The downside is that if it goes down, the losses move at the same rate.LotThis is the smallest transaction size allowed by the forex broker. If for example a broker fx operates with lots of 1000 units, this will be the minimum amount of currency units of a particular currency with which you can operate your customers.SpreadIt simply refers to the difference between buying and selling prices on the market.Criteria for evaluating a forex broker
When deciding to invest in forex, one of the key decisions is to choose which broker FX to operate. Marketing campaigns are often quite aggressive and all focused on how much money you can earn. Sure, you can make a lot of money, but that if you are a good investor does not change regardless of the broker. What does change and much is the money that can be lost. If investments go bad, online brokers can do little. It is your responsibility and there is nothing to say. What is not permissible in any way is to lose money because the broker is a scam and we do not want to give it back. That's why the first thing you need to make sure is that the broker is not a scam. If there is the slightest suspicion of any type of scam, we recommend
that you choose another broker from our list available at the top of
this page.How To Know If A Forex Broker Is A ScamIndeed, the most important factor for you to choose the best forex broker to trade with forex trading should be security. But how do we assess whether a broker is likely to be fraudulent? Here are some checks that should never be missed.
Regulations: FX brokers are companies through which they reach the financial markets and, therefore, if they operate licensed in a European country they must comply with a series of regulations. The most important of these is the MiFID. Knowing that a broker must meet your requirements is certainly a guarantee of tranquility.
Physical address and contact information: Fraudulent brooks generally do not have actual physical addresses. Whether a broker has one or more venues is a small factor contributing to
Regulations: FX brokers are companies through which they reach the financial markets and, therefore, if they operate licensed in a European country they must comply with a series of regulations. The most important of these is the MiFID. Knowing that a broker must meet your requirements is certainly a guarantee of tranquility.
Physical address and contact information: Fraudulent brooks generally do not have actual physical addresses. Whether a broker has one or more venues is a small factor contributing to
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