Forex is an international financial market for currency exchange

What do you think is the most relevant and promising way to earn money? For example, professions such as telephone operator, lamplighter, chimney sweep or cab driver became obsolete in the last century. Many modern professions, according to many futurologists, will soon also remain only in memories due to active technological progress.

But trading is exactly the kind of activity with which you can earn money at any time. Because the financial market does not become obsolete and does not lose its relevance: people always need to exchange money, which means that the international currency exchange market will still be necessary.

Accordingly, there will be those who will be able to make money from fluctuations in market rates. That is, traders. And if you want to become a trader and have the opportunity to earn money anywhere and at any time, this article is for you.

You will learn:

• what is the international Forex market;
• who can participate in Forex trading;
• why trading is an opportunity to make a profit;
• top 10 interesting facts about the foreign exchange market;
• what is a broker and why does a trader need one;
• 5 key signs of a reliable broker;
• how to become a professional trader from scratch;
• what services help a trader to be as efficient as possible;
• how the example of Alexander Gerchik can inspire you to success.

Forex is an international market where traders make money on currency fluctuations

Forex is a word that was formed from the phrase Foreign Exchange (currency exchange). In other words, this is a global world market where you can buy or sell national currencies of different countries.

Interesting to know!

When did Forex trading appear? This market is quite young: it arose in the 70s of the twentieth century. The prerequisite for this was that the previous currency exchange system, which pegged all currencies first to gold and then to the dollar, was outdated. The world's largest financiers have decided that the optimal currency system is one in which rates are formed solely on market bases, that is, on supply and demand. The so-called floating exchange rate of freely convertible currencies appeared, and Forex became the market for their purchase and sale.

What is forex used for? First of all, so that capital can move freely around the world - for example, to carry out international business or for travel. Let's figure out who is involved in trading operations on the foreign exchange market.

How is the value of an asset formed?

In the foreign exchange market, price formation occurs due to constant changes in supply and demand. Every time you buy a monetary unit on the market, demand arises, due to which the price rises. When selling, there is an excess supply, and the price of the monetary unit is directed downward.

However, slippages and requotes should also be taken into account. In the first case, the price “slides” up or down, and in the second, the trader receives a refusal to execute the order, with an offer to enter or exit the market at a new price.

Slippage is the execution of an order at a different price due to a change in market conditions.

Here you need to understand that slippage is a natural thing. They happen on the news when there is a stir. Therefore, it is not always possible to fulfill it at the price you “ordered”. It's like at an auction... demand creates an increase in price. You wanted to buy for one price, and were just about to raise your hand when it was interrupted. This is the norm. And artificial slippages, when the price is “regulated” manually, are not the norm. This is what kitchen traders sometimes encounter.

Both large banks and small traders can trade Forex

The most significant players in the interbank Forex market are banks. First of all, central banks, which sell and buy billions of dollars of currency every day. The task of central banks is to maintain a favorable exchange rate for the national currencies of their countries, and for this they sell or buy enormous volumes of currency.

Commercial banks also play a very significant role in trading in the interbank market. Therefore, they are also called key players, or market makers. In fact, it is banks who, through their transactions, move currency rates up and down, swinging supply and demand. And smaller participants (for example, traders) need to adapt to these conditions and, using market analysis tools, predict the direction of prices in order to make money on it.

Investment and pension funds also participate in Forex trading, investing their clients’ funds in the most promising world currencies. Large trading companies operating internationally also exchange currency, that is, they participate in foreign exchange trading. Their influence on quotes, although not as significant as that of banks, still should not be discounted.

And now that you know that Forex is not just a game or a hobby, but a global currency exchange market in which major players take part, you will no longer doubt the seriousness of Forex trading.

Alexander Gerchik tells more about the big players and how they operate in this video

The concept of volatility in the market

Thanks to volatility, financial market participants have the opportunity to generate profits. This is the volatility of quotes during the trading process. But if you're not careful, volatility can be disastrous for your bottom line.

Most often, an increase in volatility can be observed during news releases. Remember that at these times spreads widen and orders from broker clients may be executed with slippage, positive or negative.

Pairs that do not include the dollar are considered more volatile because they are traded by fewer financial market participants. This means that any news can cause a strong distortion. It's like when two people pull a rope, any jerk or wrong step can affect the result. And when he is pulled over by many people who are approximately equal in strength, then you have to try to at least somehow “move from the point.”

Forex trading - the opportunity to earn money regardless of conditions

What is so attractive about Forex trading? There are at least 3 main reasons:

Independence from the market situation

Imagine that you are investing in the purchase of real estate. You will only benefit if the price of housing rises. Otherwise, you will suffer losses.

But in Forex trading everything is different. It doesn't matter whether the price of a currency is rising or falling, you can profit from it.

For example, if the euro rate rises against the dollar, you have the opportunity to buy European currency with USD and wait for the EUR rate to rise even more. And as soon as you see that the euro is falling, you can profitably sell the euro back for American currency - but you will get more than you invested.

Independence from time of day

Forex trading takes place around the clock, because this market is not tied to any specific country or time zone. Transactions with currency pairs can be made both in the morning, while everyone is still just waking up, and in the afternoon, in the evening or even late at night.

It doesn’t matter whether you are a night owl or a morning person, whether you work in an office or prefer a free schedule - trading will fit seamlessly into your schedule and will allow you to feel free.

Location independent

To buy or sell currency, you do not need to come to a specific place - for example, to a bank or stock exchange building. All Forex trading processes take place online, so if you have a laptop or smartphone with a good internet connection, you can install a trading platform and trade anywhere.

Just imagine how convenient this is: while others are wasting time in traffic jams on the way from work to home, you may well open a profitable trade!

Thus, profitability, convenience and freedom are what sets trading apart from other ways of generating income.

What additional tools are available to you?

The question is relevant because the more instruments there are, the more options a trader has to choose from. For example, the company Gerchik & Co has 390+ instruments, of which 66 currency pairs and 270+ CFDs on shares.

Top 10 Interesting Forex Facts That Will Make Trading Fun

1. The daily turnover of capital on Forex is about 1 trillion US dollars. To recalculate this amount manually would take you almost a hundred years! 2. The largest financial centers in the world, in which the largest volume of funds are concentrated, are: London, New York, Tokyo, Frankfurt and Singapore. 3. On Forex, it is customary to distinguish 4 trading sessions: Pacific, Asian, European and American. Together they form a trading day. 4. The most traded currency is the US dollar. 5. The most popular currency pair is euro/dollar. 6. There are breaks in Forex trading: for example, there is practically no trading on weekends and holidays. 7. You can become a trader even without a financial education. A good example is Alexander Gerchik, who became a millionaire trader on Wall Street, having previously been a simple taxi driver. 8. You can make a profit from a Forex transaction in a matter of minutes. The style of trading with the shortest-term trades is called scalping. 9. To simplify the trading process, traders often use special computer programs - trading robots and advisors. Robots open and close transactions instead of a trader, and advisors only show at what moment it is better to buy or sell a particular currency. 10. Traders have no upper limit for earnings: for example, Alexander Gerchik’s record is $680,000 in one day.

Now you are aware of how Forex works. Now let's talk about how exactly you can make money on it.

Graphic tools for work

It is important for beginners to learn how to work with the graphical tools of the trading platform. In particular, you need to know that when drawing a trend line, it will by default have the shape of a ray. However, you can also make a segment. This requires a few simple steps: select Properties > Options > uncheck the box.

If you go to the “General” tab, you can select the thickness and shade of the segment. To change the slope, you can click on its extreme points. To get the same line in parallel, you can press CTRL and drag the line to the side.

Choosing a Forex broker is an important task for every trader

Today traders have a large choice of whom to trade with: there are more than a hundred Forex brokers on the market. But how do you know which ones are reliable and profitable and which ones are not? We have identified the top 5 key factors that you should pay attention to when choosing an intermediary company:

Bringing deals to market

Ideally, all transactions made by traders should be brought to the international market, where buyers and sellers of currencies meet in fair and transparent conditions. This is the only way you can count on correct, not “adorned” quotes, and therefore predict your profit.

But in fact, only companies from the STP broker category work this way. And there are also “kitchens” that find counterparties for their clients’ transactions exclusively within the company. Of course, no one monitors the quality of execution of such transactions, and the quotes may not be true at all. Such companies should be avoided.

Number of trading instruments

The more choice of market assets you have, the easier it will be to build your profitable strategy. Just like if you have a large selection of foods, you can create a dish to suit your taste.

By the way, Forex trading can be carried out not only with currency pairs, but also with contracts for differences in the prices of other assets - such as oil, gas, stocks, and precious metals.

Founders of the company

Agree, when you know who is at the helm of management of a brokerage company, this inspires trust. Especially if the managers are practicing traders themselves and know what conditions are needed for effective Forex trading. And if the managers are dummies or even fictitious characters, this is alarming.

Withdrawal of funds

This is one of the most pressing questions because it directly concerns your money. Unfortunately, many traders encounter dishonest companies that do their best to prevent their clients from earning and withdrawing profits.

And largely because of this, the myth is spreading that it is impossible to make money on Forex. But in the right companies there are no problems with withdrawals: applications are processed on time and without hidden fees.

Competitions and promotions

Although this is not necessary, it increases the status of the broker. After all, competitions allow traders to practice, hone their strategy and win valuable prizes - for example, cash deposits. All this further encourages the company’s clients to trade effectively.

Important!

It is necessary to distinguish competitions from Forex bonuses, which are awarded on a deposit. Reliable brokers will not tempt clients with 100% bonuses, which will then need to be wagered back. Such gifts seem generous only at first glance. In fact, they only confuse the trader because they create the feeling of a large deposit, but in reality they only increase trading risks.

In addition, bonuses are paid from company funds, and reliable brokers prefer to invest their capital not in luring clients, but in effective training programs and creating unique services for profitable trading.

If you look at all these five criteria, then Gerchik & Co meets all of them.

• The broker is guaranteed to bring all trading positions of its clients to the interbank market (which is confirmed by independent experts at FinaCom).
• Provides traders with access to two trading platforms (MetaTrader 4 and MetaTrader 5) and more than 390 trading instruments.
• Withdrawals funds strictly according to regulations and without delays.
• Regularly conducts profitable promotions and competitions (for example, a competition for traders on demo accounts with 55 prizes and winnings of $1,000).
• Its founders are professional traders Ivan Kroshny, creator of the Cartel traders club, and Alexander Gerchik, a trader with 23 years of experience and the title of the safest day trader on Wall Street.

You can find out some more information about Gerchik & Co from this short video

Anyone can become a client of the company, since the minimum amount to open an account is only $100.

Open an account with Gerchik & Co right now

Where to start

Let's look at it in order:

1. The first thing you should do is study the available brokers. Determine for yourself what conditions will be suitable for you. Take into account the license, information about who is in charge of the company.

2. Choose the account on which you will be most comfortable trading. Probable factors are leverage, low costs, account protection from negative balance.

3. Decide on a trading strategy - it must be proven and show stable positive results. However, all this will not work if you do not complete the training before you even open a demo account.

Do you want to successfully trade in financial markets? Click on the button