Get To Know Forex Trading And Its Advantages

Do you want to start dive into Forex Trading? Please start to know and understand what Forex Trading is, the following advantages and risks.

Get to know Forex Trading Advantages and Risks

Speaking of investment, of course, there are lots of platforms and instruments to choose from, one of which is forex trading.

When talking about forex trading, it can be said that one of the containers is quite risky and has big profits.

However, you also need to know that making an investment, it will not be separated from the name of risk. In fact, you should be suspicious, if there is an investment that says or claims that it has no risk at all.

Then, what is real forex trading?

What are the losses and what are the advantages?

Therefore, We is here to review what forex trading is and the following advantages.

What is Forex Trading?

This question often comes out and is asked by some ordinary people who are new to the investment world or have heard the word forex.

In fact, have heard stories that some have lost their homes or run out up to hundreds of millions just for this forex trading. However, many also suddenly get rich suddenly just by trading forex.

Then, actually “What is forex? What is forex trading?

Foreign Exchange or often called forex, which means trading activities between currencies from different countries.

Then what is forex trading? The big picture is forex trading is a process of trading foreign currencies which is done online or online.

With the aim of making a profit from the difference in the sales figures you make. Usually people who carry out forex trading activities are referred to as traders.

For example, pairs such as JPY/EUR, where JPY here represents the Japanese Yen, and EUR represents the European dollar.

How Does Forex Trading Work?

Well, actually forex is an investment where you buy a foreign currency and hope that the price of foreign currency purchased will rise to make a profit.

For example, when you buy a foreign currency such as a dollar, at that time it was still Rp. 11,000 and now the dollar has increased to Rp. 14,000. Then you get a profit of Rp. 4,000.

Well, the profit you get comes from the difference in the value of the rupiah currency when you buy dollars and the amount of rupiah when you sell dollars.

Then the loss is the same as what you get, which comes from the difference in the value of the rupiah at the time of buying the dollar and the amount of the rupiah when selling the dollar.

In the world of online forex trading, this can be done easily through the help of trading software that has been provided by the broker. Where every online forex broker will provide a trading software for use by its clients.

With the software provided by the broker, you can trade pairs or currency pairs anywhere in the world. However, this still depends on the availability of the broker you use.

Advantages of Forex Trading

1. Transactions can be done 24 hours a day

The first advantage of forex trading is that currency or fund transactions can be carried out during full hours.

TRENDING: Forex Trading Strategies to Become a Successful Trader

Of course, this is very different and not the same as transactions in the capital market where the forex market will be active for a period of 24 hours and you can make any transactions.

It’s just that you have to understand that each country has a different opening time schedule.

2. Benefit from Exchange Rates

Well, the next advantage of forex trading is to profit from the exchange rate at the time you buy and what is currently happening.

That way, you can buy when the value of the currency is low and sell when the dollar price is high or rising. You can also buy when the currency price is high and resell it at a higher price.

Regarding the movement of the dollar, there are three possibilities that will occur including, up or often called an uptrend, then fixed or sideways, and finally down or downtrend.

If the currency is going up, then you will get a huge profit, but if the currency value is going down, it will tend to continue to decline.

If it is going up, then big profits will be obtained but if it is down, the value of the currency will tend to decrease as well.

That’s why you should know the purpose of investing, before investing. Don’t forget for those of you who want to start trading forex, it would be nice to have provided an emergency fund that can be used at any time if something sudden happens.

3. Benefits can be felt immediately

The next advantage that traders get is from the increase in the price of the difference in the value of the rupiah currency when buying dollars and the amount of rupiah when selling dollars.

While when you make a sale, the profit obtained is from the difference between the selling price and the purchase price or referred to as closing.

The other advantage is that there is no additional fee, it’s just that it is subject to withdrawal or withdrawal fees originating from your forex account.

The Risks Of Trading Forex

After discussing the advantages above, of course it’s a good idea to know the risks of forex trading. The most obvious and real risk in forex trading is that you can lose all the capital you have.

Maybe all of you are wondering, for how long? As for how long, this will come back again depending on the transaction made by you.

If you make transactions carelessly or without clear analysis, and lack of good capital arrangements. So, you can lose all your capital in just a matter of minutes.

How could this happen?

Yes, because there is a leverage system used by forex brokers. Where with this leverage system, those of you who only have small capital can immediately jump into forex trading. However, the side effect is that you will lose all your capital.

However, you need to remember that forex trading or forex trading is not just a quick way to get rich. It also requires experienced and good processes, analysis, practices to be able to benefit from this forex trading.

At the same time, you must have high discipline and have the basic ability to manage finances or good money management in order to get optimal profits.

Well, that’s a brief explanation of the basic understanding of forex trading which is summarized in a simple way. You can try by starting to create a demo account first from an existing broker.