FOREX TRADING

Actually the existence of Forex Trading has long been available since the discovery of techniques to convert a country's currency into another country's currency. However, the new institutionally there after an arbitration body set up futures contracts (futures). An example is the IMM (International Money Market, founded in 1972) which is a division of the CME (Chicago Mercantile Exchange-specific product handling perishable commodities). Another example is the LIFFE (London International Financial Futures Exchange), TIFFE (Tokyo International Financial Futures Exchange) and so on.

Turnover that occurs in the forex market reaches U.S. $ 5 trillion per day (survey BIS - Bank for International Settlements, in September 2008). This amount is 40 x higher if compared to the velocity of money on such commodity futures exchange or any other stock market in any stock exchange of any developed country! This means that the trading volume of that size, this market is very liquid (liquid), and control of trafficking can not be held by only a few parties who have big capital. Currency movements are entirely dependent on the market. There are many large and small players in forex trading, but none of them are able to control the movement of foreign exchange rates.

Frequently traded currency is the currency in the developed countries like the U.S. dollar (USD), Japanese Yen (JPY), Swiss Franc (CHF), British Pound (GBP), Australian Dollar (AUD) and Euros (EUR). All currencies are traded in pairs (called Pair), for example EUR / GBP, CHF / JPY and so forth.

Then from where I obtained a benefit from this investment? In simple, the benefits of this investment is obtained from the value of the difference when we buy and sell back the currency of the country concerned. For example, in April I bought the dollar exchange rate of Rp. 8500, - per dollar of U.S. $ 1000. So at the time of my purchase of this currency to pay as much as Rp. 8500, - x 1000 = USD $ 8.5 million, - Then in May, the dollar strengthened against the rupiah to Rp. 9500, - per dollar, the net profit which I get when he sold the dollar return is: (9500-8500) x 1000 = Rp. 1.000.000, - Easy and simple is not it? And because it - average time it takes to buy and sell back the currency in question is usually no more than one month, then the forex trading are classified as investments with short-term.

Perhaps such questions will arise from you: "Then what's the difference Forex Trading with buying and selling at the money changer?" There are some striking differences between Trade Forex with the money changer. In addition to the trading partner is a foreign currency with foreign currency (at the money changer is usually paired with the amount), Forex trading does not involve physically. And more importantly because it does not involve physical trading, Forex Trading can be executed with a margin or collateral (margin trading).

For example if I want to buy U.S. $ 10,000, then the margin trading system with me enough to spend just 1% amounting to U.S. $ 100 as security. But the benefits I get from the appreciation (increase) the U.S. Dollar is equal in value to U.S. $ 10,000 which I bought. Very simple and because it does not involve trading in physical form (investors do not hold the currency bought or sold, only evidence of the transaction only), then the guarantee given to very small: only 1% of the amount that would be purchased.