ePeople

Net Money Forex trading (Forex Trading)

Are poor and want to make money? You gave a search on google after the word "forex" because you heard from someone that is very easy to create your account with a few dollars and I multiply 3 times overnight ... suddenly you see many tempting offers for forex market . Incredibly, with just $ 20 you can make your account with us and quit work and become financially independent!
Wonderful is not it? Hello! You were born yesterday?

First you need to know that there is an area where you can win something without Princep. And if you think you can make forex easy, then certainly do not understand ...
And then what? Well the best would be to learn something. High heat recommend two sites: Wikipedia , for general references and intro, and then to understand how it works a little work you can allocate 2-3 hours and read the site www.babypips.com / school , which to me seems the best starting point.

In short, the Forex (Foreign Exchange Market) is a currency market where currencies change by large players (such as banks and large organizations with more capital). Basically, a "player" of the forex market should determine the direction in moving a certain quote currency.

For example, the EUR / USD is 1474, and ever since the course was in decline, its anticipated growth. So the player buys a lot (or contract) of 100,000 eur to quotation 1474, expects this to rise to 1475 and then sell getting profits. Of course, should not you have the all 100.000eur, but only a certain percentage of this amount, respctiv margin (hence the name of trading on margin). Margin and contract size (lot) are generally specific to each broker (that is where you sign). Usually the margin is 1% for semi-profestionsti traders accounts (so you need to trade a 1000 eur 100.000eur lot), but can be traded and mini lots of 10,000 units at lower margins, margins of 0.25 % is common for beginners accounts. Generally you will find the notion of margin and as the name "Leverage", like 100:1, 200:1, 400:1. Leverage of 100:1 means 1/100 = 1%, and 400/1 is 1/400 = 0.25%. Meaning you can trade x amount, effectively providing only the margin of 0.25% of it. In theory it sounds nice, it's almost two-edged weapon that can backfire, and when something bad may happen, it will happen!

To explain a bit and what a pip and what is the cost of a pip. A pip is the smallest variation of the quote. If eur / usd, if quote is 1.4567 and jumps to 1.4568 - a means to marry a pip. In other currencies where quotations are to 2 decimal places one pip is 0.01 instead of 0.0001 in our example. The price of a pip is, in our case when the lot is 10,000 units (0.0001 / 1.4567) x 10 000 = 0.69 units. If you have lot of 100,000 units when PIPul will be $ 6.9. That's the amount you win (or lose) every movement of the course with a PIP as my anticipation correct (or incorrect).

Working with you to trade leveraged practical when you you have large volumes of small amounts - so it is a facility granted to those with limited funds. The problem is that if you go wrong quotations, because small amount of money available, the player can not last long, and the broker will close positions because of margin call. So something will happen more difficult for a player to go with 10:1 leverage for example ...

Traders tranzacioneaza profits with margins of 10%, or 50% (2:1 leverage) for several reasons which I will try to explain further: to a 100:1 leverage price fluctuation of 1% leads to a change the balance of my account with 100% (that can double the amount or lose everything). At a leverage of 50:1, the same fluctuation lead to changes in my account with only 50% .. and as a leverage of 2:1 lead to changes in my account with only 2%. If I leverage of 200:1, 400:1 or worse, then I can survive and less fluctuation in the quotation against me. This means that the risk of losing all the money (margin call) is even higher as I have an account with greater leverage (higher is 200:1, 400:1 ...). Of course, the ideal is to have a leverage of 2:1 or there ... but then to open a standard of 100,000 units of 50,000 actually need ... that is a considerable amount!

Do not you have to be very smart to figure out what chances do you have your $ 20 and a 400:1 leverage over those who play money profits!

So, good luck in forex!

Related posts:

1. Financial Betting