basic of the forex

Two types  of analysis  are used for market  movements forecasting: fundamental,  and technical (the chart study of past behavior of currencies prices). The fundamental one focuses on theoretical models of exchange rate determination and on major economic factors and their likelihood of affecting foreign exchange rates. 1. Theories of exchange rate determination Purchasing power parity  states that the price of a good in one country should equal the price of the same good in another country, exchanged at the current rate—the law of one price. There are two versions of the purchasing power parity theory: the absolute version and the relative version. Under the absolute version, the exchange rate simply equals the ratio of the two countries' general price levels, which is the weighted average of all goods produced in a country. However, this version works only if it is possible to find two countries, which produce or consume the same goods. Moreover, the absol...

Foreign exchange as a part of the world financial market Forex – What is it? The international currency market Forex is a special kind of the world financial market. Trader’s purpose on the Forex to get profit as the result of foreign currencies purchase and sale. The exchange rates of all currencies being in the market turnover are permanently changing under the action of the demand and supply alteration. The latter is a strong subject to the influence of any important for the human society event in the sphere of economy, politics and nature. Consequently current prices of foreign currencies, evaluated for instance in US dollars, fluctuate towards its higher and lower meanings. Using these fluctuations in accordance with a known principle “buy cheaper – sell higher” traders obtain gains. Forex is different in compare to all other sectors of the world financial system thanks to his heightened sensibility to a large and continuously changing number of factors, accessibility to all i...

To be able to do forex trading independently, required a deep knowledge of the mechanisms of trade, technical analysis / fundamentals and how to trade forex through internet. If knowledge is already occupied then we can decide to make a real forex trading independently. In making a real forex trading there are some things that need to be considered by a trader. The success of a trader is not only supported by science and understanding of foreign exchange per se, but is also determined by the behavior that must be maintained before and during trading. Here are some psychological aspects must be considered a trader who wants to make their own forex trading: Understand the purpose of trading. Understanding the objectives to be achieved in trading will make us always in a clear direction: just making a profit by speculating or securing positions owned investment basket. Do it only if you can bear the loss. Forex trading is a type of investment that has a large ralatif risk (high risk ...