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Forex Market as the Key to the Financial Freedom

Do you know to get the financial independence with only your own brain and luck? The global financial markets offer such an opportunity for everyone. Gold, oil, aluminum and even coffee all are the elements of global trading system which is regulated by the financial markets. All these components are the backbone of advanced economies. Trading using different financial instruments such as bonds, commodities, stocks and futures as well as cash currency transactions in the Forex market are the main parts of the global financial markets.

The daily turnover of Forex trading market consists more than $ 4 trillion a day and that are the huge trading volumes. This amount is much higher than the total value of shares, which are sold and bought all over the world in stock markets during the year.

Do you want to obtain fast and unlimited profit? Many businessmen know the secret – just use these tools. That’s the reason to choose Forex currency trading instead of slow stock exchanges. Many experts admit the currency trading in global markets to be the best basis for long-term financial independence.

Forex market was formed in the 1970s as the interbank market. The exchange rates were shifted to floating exchange rates. Since that time the exchange rate has been determined by the exchange ratio of one currency related to another.

Strictly speaking, Forex market is not considered to be a “market” in the traditional sense of this word. There is no specific place or area to trade, such as for example the stock exchange has. The process of trading takes place via telephone and computer terminals all over the world. It’s open 24/5 and this is the advantage of the Forex market for investors. Throughout the working week the Forex currency exchange never stops in every time zone. Forex dealers in New York, Tokyo, London and other global financial capitals buy and sell currency constantly. Instead the stock market trading stops in the late afternoon and resumes until the next morning.

Currency dealing is carried out by very qualified specialists, Forex dealers. This is a very special kind of activity, which includes conducting of foreign exchange and many related operations in the currency markets. This business is one of the most complex activity in global trading system.

What types of operations do take place in the Forex market

There are three main types of operations:

  • Forward transactions - the delivery may take from several days to several years.
  • Spot type operations - the delivery date is the second business day after the trade date.
  • Foreign exchange futures and options - the delivery is determined by the Exchange according with exchange rules.

The class of margin transactions are not governed by regulatory agencies as the SEC. The currency speculations are considered to be the margin transactions, so the credit “shoulder” can be determined by agreement between the customer and the brokerage firm or the bank. The margin’s amount depends on the amount of collateral for a loan and usually equals 1:50 or even 1:100. That’s why with deposit of $ 2,000 and the “shoulder” 1:100 you can perform transactions in equivalent to $ 200,000. So just imagine the opportunities you get with Forex market.

The size of this margin depends on the loan, in fact, only the amount of the customer and merchant collateral usually 1:50 or 1: 100. That is, by making a deposit of $ 2,000 and having a "shoulder" 1: 100, the client can perform transactions in the amount of $ 200,000 equivalent. In other details the currency trading account operates as a brokerage margin investment account.

The currency trading and the quotes or simply the currency prices are in the constant motion, depending on different factors, such as political, economic and commercial indicators, time of the day, the policies of central banks and others. The Forex dealer’s main task is to determine the direction of the trend and to buy the currency, which price will be increased to make profit with return transaction.

The main aspects of investment process in the Forex market are:

  • Psychology;
  • Time and risk management;
  • Fundamental and technical analysis.

Fundamental analysis includes the monitoring and interpretation of indicators that appear in last news and may affect the global trading system.

Using technical analysis you may find out the trend’s direction and price movement and find out if the trend is short-term or long-term.

As you may see, the Forex dealer’s activities are interesting and versatile. Besides, the Forex trading market allows you to become independent and find your own different way of life.