WHAT EXACTLY FOREX IS?
Forex (short for Foreign Exchange) – exchange of currency. FOREX is primarily considered an international currency market – the biggest and most active financial exchange market on the globe. Its daily turnover exceeds $5 trillion. This exceeds the turnover of all national stock markets put together.
Forex market players are the largest banks and central banks of different countries, credit and debenture funds, large companies, and private investors with huge personal capital. The deals in this market start from $1 mln.
Meanwhile, Forex is often called the market where people do not buy and sell any real currency but only conclude betting transactions on the rise or fall of currency exchange rates. It was organized by the specialized companies – Forex dealers.
One cannot buy currency with a Forex dealer. If you need dollars, euros, pesos, or yuan, you can exchange them at the bank or a currency market through a broker.
WHO CAN TRADE ON THIS MARKET?
Previously, the Forex market was available only to large corporations and wealthy entrepreneurs. But today, thanks to Internet technology, anyone can become a Forex trader. To do this, you need a minimum capital of $500-1000, a little luck, and an exchange intermediary in the form of a Forex broker, who will be your guide.
FOREX BROKERS, THEIR FUNCTIONS, AND CONTROL
The law forbids individuals to make transactions at the exchange of currencies. Such operations require the participation of a forex broker. It can be both an individual or a legal entity with a special license on hand. A Forex broker is an intermediary between the investor and the world of big money and his activity should ideally always be regulated by the relevant governmental authorities.
A license is one of the most important documents for a broker. It confirms the professionalism of his activities. It is illegal to operate in the field of stock markets without it. Therefore, a Forex broker, who does not have a license from the regulator, does not deserve an ounce of trust. His words and promises are just an empty shell. Working with him is a guaranteed way to lose money.
WHAT DO I NEED TO TRADE IN FOREX?
The game on the exchange begins with registration on the resource of chosen (and necessarily checked) forex broker. After that, it is necessary to open and deposit the client account. The minimum amount of investment is from 500 to 1000 USD.
Forex trading is carried out through special platforms. Forex.com, Saxo Bank, and CMC Markets are examples of the most popular ones, although there are others. These platforms have a wide range of available functions. Such as transactions, development of strategies, graphical analysis, use of technical indicators, and automation.
WHAT DOES A FOREX BROKER EARN ON?
Spreads can be called the main and the only source of income for a forex broker. The term spread itself means a fee for trading activities or the gap between the purchase of currency and its sale. That is the broker profits from the quantity and quality of your transactions. He is just as interested in the success of the deal as his client because his well-being directly depends on it.
HOW TO CHOOSE A FOREX BROKER?
Successful forex trading relies heavily on the broker and the trading environment he provides. For minimizing the risk, it is necessary to choose a company with a name, a solid history of work in the market, a solid image, and a lot of reviews about forex brokers in Nigeria.