What is the Forex market about?
Forex - is an international currency exchange market. In fact, it is global, transnational trading platform for the purchase and sale for all available world currencies. Currency - it is also commodity and it is very popular. And as the currencies have collateral, that is the cost of each individual currency it is guaranteed, the exchange rate is not stable and is tightly tied to the economy of its country, which is affected by many aggregate factors. In this case, the rate of each currency is sometimes lowered or raised. And on the difference in prices of raising and lowering the cost of one currency relative to others, one can make good money. This is what Forex brokers do - currency speculation and earning on margin.
Who needs currency?
The currency is always in demand even among individuals for their household and the product of small-private settlements, and in state and global settlements it takes important volumes that only Forexcurrency exchange can provide. Therefore, the main market participants are large international banks that require daily operations with different currencies. If the bank doesn’t have a currency what is important for making payments/transfers, it has to buy it tin the Forex market in exchange for the currency available to it. A lot of financialtransactions and deals are strictly tied to a particular currency under contracts. That is why, there is always a demand for foreign currency, not only for banks, but also for TNCs, insuranceand pension funds and from individual states. Currencies have their own limited volume, and it doesn’t increase due to demand, so there is constantly increasing and falling prices, rising and falling demand, overflow and currency exchange.
Those who do not understand the essences and principal of the functioning of the currency exchange are sometimes inclined to compare Forex with “pyramids”and the like illegal organizations. However, the Forex market is a legal, legitimate exchange, in demand by the international economy and every individual state.
Leading participants of currency trading in the Forex market:
- International banks.
- National banks.
- TNCs (transnational corporations).
- Electronic payment systems.
- Crypt exchange.
- Insurance companies (commercial and state).
- Pension funds.
- Large financial institutions of private business.
Regulations and functioning of the Forex market
Trading in the Forex currency market works 24 hours all five working week days, from Monday to Friday inclusive, without any time-outs. Conventionally, on the time of the day, trading in the Forex is divided into three sessions: Asian, European and American. Although, the division is very relative and conditional, but the trends and behavioral factors in separate sessions are quite different. Therefore, in the technical analysis of the market, we have to make adjustments taking into account the sessions.
The Forex currency exchange does not have stationary trading platforms, all trades are held in electronic format, due to which around the clock access is granted to participants from all over the world. Trading on the Forex market is completely free, as well as in the usual market: some sell goods, others buy them, fluctuations in prices depend on supply and demand. There are also collapses of the market with a glut of some currency or with a shortage of a demanded product.
Getting profit on Forex for individuals
The receipt of profits by individuals from foreign exchange trading is possible because of their possession of currencies as a commodity. But, not being a legal entity, a large financial institution and not having licenses for trading on the Forex market, a private person can not directly participate in trades. For this, there are special intermediaries - Forex brokers and dealing centers (DCs), which work for a percentage of the client's profit.
The receipt of profits by individuals from foreign exchange trading is possible because of their possession of currencies as a commodity. But, not being a legal entity, a large financial institution and not having licenses for trading on the Forex market, a private person can’t directly participate in trades. So, there are special intermediaries - Forex brokers and dealing centers (DCs), which work for a percentage of the client's profit. Licensed brokers of the currency exchange ensure the legality of transactions and carry out risk diversification, which insures their customers against ill-considered transactions and ruin. Cooperation between individuals and brokers is mutually beneficial. An individual doesn’t have the opportunity not to mediate foreign exchange transactions. And brokers receive a percentage of profits from successful transactions made on behalf of the client. The broker receives payment for his work in the form of percentage deductions, but only if the transaction is successful and the client has made a profit. Therefore, the client can be sure of the direct interest of the broker to ensure their mutual profit.
As transactions are carried out in the foreign exchange market on very large amounts, the more funds are available to the bidder, the higher the chances of profitable speculation and a higher margin. It is for this purpose that brokers and dealing centers attract as many customers as possible, in order to have impressive assets at their disposal. After all, for example, if a large international bank urgently needs an amount of several million in some currency, it will not buy it in hundreds and thousands of units in several thousand individual transactions, and immediately open a deal for the amount necessary for it. Who will be the first to secure this deal - he will get a margin, and for this it is necessary to have in his assets the same few millions in the required currency. The bank offers a higher rate, as it saves on the number of transactions and on the time of transactions. A small market participant who does not have the right amount at his disposal will not be able to secure this deal. But a large broker or dealing center will act as an intermediary. Independently a private person would never be able to sell a currency to a bank at such a price, but having entrusted his funds to a broker - indirectly participates in this transaction for the amount available to him, and the broker for this gets his small percentage of profit. All participants get a profit and everyone is happy: an individual, a broker, and a bank. This is exactly how trades are conducted on Forex.
Ways to make money on the Forex market for individuals
Trade in the Forex currency market can be made through a broker in various ways:
- Independent trade.
- Automatic trading.
- Delegation of transactions to the broker - is trust management of accounts.
- PAMM accounts.
Independent trading in the foreign exchange market Forex
Registering on the broker's website and signing an agreement with a broker, you can independently conduct currency speculation in the Forex market. However, for this, it is necessary to have competence in this kind of activity. In addition, to conduct successful transactions, it will take a lot of time to collect and audit information, as well as directly to conduct transactions in a manual mode. This type of earnings on Forex is not suitable for everyone.
Automatic trading in the Forex currency market
Nowadays, there is a lot of client software that will help with analytics and trading in the foreign exchange market. The robot will collect all the information and analyze the current situation on the market, check the history and conduct technical analysis of the market and, in accordance with the analytics, will provide the most profitable transactions for you in the selected currency pairs. Each robot has its advantages and disadvantages. If you choose the right software, use the settings skillfully and do not forget about careful control, you can automatically get a good margin. This isn’t a bad way to earn money on Forex for beginners, but buying a quality Forex robot -will not be cheap and it will take a lot of time to set it up.
Trust management of accounts - delegation of transactions to the broker
Trust management is the simplest and the most reliable type of earnings in the Forex currency market. You trust all transactions to the broker and receive your income without spending your time and effort. At the disposal of the broker, there are qualified specialists in the field of finance with experience of working directly on Forex. Also, the broker has extensive information from hundreds of different sources and can profitably evaluate and forecast the situation on the market. Also, major brokerage companies like IREVI have the innovative technical support, the best Forex robots and direct access to the trading network. The broker makes a profit only by providing successful transactions for you, and how he knows it better than you. In addition, there is a diversification of risks, and your funds are insured on the account. Trust management is easy, convenient, reliable and profitable.
PAMM-accounts for earnings in the Forex currency market
PAMM accounts are the percentage modular distribution and account management that combines automatic trading and trust management of accounts with a broker. The program automatically combines several customer accounts and allows the broker to conduct large transactions with a high percentage of margin. The income is distributed as a percentage of direct investment. This type of investment by a large broker brings the highest profit, as it provides a margin with the most profitable transactions and doesn’t require large capital investments.