Why is it so popular forex market and what are the possibilities to operate on it? Known elements of the Contracts for Difference.

The forex market, also known as market Currency, is one of the most popular at the time of invest. This is because it offers the possibility of operating margin, has a high liquidity 24 hours a day and also the costs associated with the operations in this market can be considered low cost. Investors in forex speculate with the price of foreign exchange so that try to anticipate market movements, predicting whether a currency will rise or fall in relation to another.

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Trading in the Forex market margin

The Forex is usually operated with sidelines. Thus, a relatively small reservoir to control positions longer on the market. When operating on major world currencies, many of those interested in the Forex market to operate in this through CFD (Contracts for Difference).

These allow you to operate with a margin, which means that with a deposit of just one euro an investor can handle much higher amounts. Anyway, one should always keep in mind that the CFD operation also involves the losses are greater than the initial margin, so it is necessary to control the risk that this form of investment assumed.

Risk management in the foreign exchange market

Trading in the Forex market can be of great benefit, but also carries risks. Therefore it is essential to understand how this market to know what risks they may encounter and how to handle the situation. Fortunately, most CFD providers available to its customers a wide range of risk management tools such as stops guaranteed or stops limits, which will serve if the market does not play to his favor.

Forex Pairs

Forex operations are made in pairs, ie exchange operating on more than one country. For example, the Australian dollar could be based on another currency like the U.S. dollar. This change AUD / USD 0.90458 means that one Australian dollar would be equivalent to 0.90 U.S. dollars. If the AUD / USD rises to 0.91458 would mean that it will take more U.S. dollars to buy Australian dollars. The major currency pairs are EUR / USD, EUR / GBP, AUD / USD, GBP / USD, USD / JPY and USD / CHF.

How the trading Forex

The procedure is simple, the investor should only ‘buy’ if you think that the first named currency in the pair will be strengthened, or ‘sell’ if you think that the first named currency in the pair is going to weaken. One of the leading providers of CFD currency is IG Markets. This company offers a wide variety of free courses to help you catch up on the Forex and the trading CFD.