What is the Forex market?

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What is the Forex market?

Content

  1. What is Forex trading?

  2. Highlight on Forex History Data

  3. How many traders are involved in the forex trading market?

  4. What is margin trading?

  5. What does forex cashback mean?

  6. How to earn more money using forex affiliate programs?

  7. Why should forex trader join invstoc cash back program?

  8. What makes a forex affiliate program more profitable than other traditional one?     

 

What is Forex trading?

Simply FOREX trading is a term  stands for Foreign Exchange

As the part (FOR)  From the word Foreign and the part  (EX)  from the word  Exchange.

First of all, in forex trading, you have to know that the international currency market is the largest trading market at the moment.

You will understand the enormity of the forex trading market when you realize that the New York Stock Exchange, the largest stock exchange in the world, trades at $ 30 billion a day while trading in the currency exchange market worth $ 5 trillion daily.

This is more than enough to realize the size of this huge market.

 

forex market

 

Highlight on Forex History Data 

 Why is forex trading is not common when compared to trade in stocks and commodities that have spread over a hundred years?

The reason is the freshness of the Covenant.

After the Second World War and specifically in 1947, when the victorious states signed the Bretton Woods Agreement to arrange the development of the world economic situation.

One of the conditions of this system was the revaluation of currencies against the US dollar as an alternative to gold as a means to help repair the damage caused by the war in Europe, and the most important result of this decision is the stability of the currency. Prices and set a minimum of volatility against the dollar and against each other.

For this reason, there was no opportunity for currency trading, which relied mainly on the purpose of currency fluctuations against the US dollar.

But in 1971, as a result of difficult economic conditions, US President Richard Nixon decided to separate the US dollar and currencies in Europe and Japan, which touched on the volatility of the currencies of Europe and Japan under the influence of strength or weakness of the US dollar and the American economic system,

From this history the Forex trading market has grown simultaneously in the US, Europe, Japan and other countries 

How many traders are involved in the forex trading market?  

 

But with the continuous development of communications and the rapid spread of computer and Internet use, the large number of enterprises have managed to trade currencies and take advantage of opportunities that ultimately lead to great profits and very quickly.

As you know, the global forex and  currency market is the latest market among all the stock markets, making it vague and unknown to most people who have been accustomed to trading stocks and commodities for decades, where the number of traders in the Forex trading market  is about 4 million traders, according to the recent studies and by the utilization by forex brokers the advantage of what we called Margin trading  the number of small traders has been grown in a massive way day after day.  

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As currencies continue to fetch up and fall all the time, why don’t we look for currencies that we anticipate to ensure higher prices and then purchase them at a lower cost and make a profit by trading them?

But here comes the trouble... Actually to benefit from this simple movement of currencies  should provide a huge capital, which establishes the entree in this market limited to the rich and businessmen only

Do not worry, here comes the role of brokerage companies forex trading market, licensed by the international financial institutions and recognized internationally, where these forex trading brokers solve this problem so that everyone can enter this market and benefit from it through the so-called margin trading using leverage.  

What is margin trading?

Today gets a detailed explanation of the meaning of margin trading before applying on forex trading market

For example, you are an expert in the types and prices of cars. It was your dream to trade in this market, but you do not have the cash to load up your project.

In the margin trading method you will proceed to a large car dealership  and inquire for a car you expect from your experience that you will detect order in the market, assume that the pecuniary value of the vehicle at the dealership is $ 10,000

All you accept to do is buy the car by paying $ 1000 to the owner of the dealership and become the owner of a car worth $ 10000... Only here the car remains at dealership reserved in your name and the amount of $ 1000 will be mortgaged at the proprietor.

As the intention of buying the car is to trade it you will get to the market and offer your car, hoping to sell at a toll higher than the price you bought it.

Now imagine that when you moved to the market you found that the demand for the caliber of your car is high and that there are a bunch of people would wish to purchase..Then you will put up your car at the price of $ 12,000, for example...

If you sell it at this price, your net gain from trading in this car will be $ 2000

In  case of profit, the car dealership  will take off the original value of the car ($ 10000)  and  refund you the deposit you paid $ 1000 plus the total profit of $ 2000

It's a tremendous opportunity, is not it?

This is because the possessor of the auto dealership has given you the chance to double the leverage of your paid capital, which is $ 1000 to ten times that of $ 10,000, thus giving you the chance to sell a commodity whose actual value is ten times larger than the value of your paid capital.

This is called Leverage and this is exactly what happens in the forex trading market

When you consider the possibility of doubling your capital ten times the meaning of that you are yielding for your investment and you accept the chance to trade a commodity worth more than ten times the value of your capital.

When you take the possibility of multiplying your capital by one hundred times that means that in return for paying a sum you will accept the chance to sell a commodity worth more than one hundred times the value of your capital.

Here, You will get a full profit as if you actually have the item.

That is, if we applied this to the previous example, for your payment of $ 1000, you could trade $ 10,000

.. This is happening hundreds of millions a day in the forex trading market and margin trading system.

Merely what if you got to the market and found that the demand for your car is poor and that no one wants to purchase it for $ 10000 and the upper limit price for anyone can buy your car is $ 8000?

Means that if you betray it at this price, your loss in trading this car will be $ 2000.

You will be asked to fill in the value of the car from your pocket, which implies you will be asked to pay $ 2000 until you complete the value of the car and then repay the down payment you paid in forwarding motion.

But as the car dealership does not share the profit, he does not apportion the loss. As same as, in forex trading market.

Whether you gain or lose, he  does not require you to pay whatever extra money  you will pay only the actual car price,

If placed to sell the automobile at a cost higher than the purchase price will be gone through and will derive the value of the car and then return your deposit plus the total gain.

If you order them to sell the car less than the purchase price, the order will also be packed out and you will have to pay from your own pocket to complete the value of the car in full, and that amount is your loss on this transaction.

In the previous example, when you traded the car for $ 8,000, you would have to Pay $ 2000  to the car dealership.

You are the one who turns out the crimson ink, not the car dealership.

But why not deceive the automotive agency?!

Considerably, when we began dealing with the car dealership, which permitted us to repeat the capital tenfold, all we paid was $ 1,000. When we asked the dealership to sell the car for $ 12,000 - after we establish a purchaser at that price - the authority sold the automobile at the price we fixed, the guarantors paid back with wide earnings.

Thus, if we ordered the dealership to sell the car at $ 8000, we would not add anything from our pocket, then the agency has $ 1,000, so we will force the auto dealership to stand the passing.

And then we will not pay anything... We will flow away.. !!

In ordination to ensure that will not fall out, dealing with the margin agency has a particular scheme that we can sum up in one conviction:

You must deposit the maximum sum of money that you may lose in the bargain in advance with the Car Dealership.

How so?

This sum of money will be deposited in advance with the Car Dealership.

In replication, the auto dealership will double your leverage and allow you to trade a commodity in return for paying only 1000 $  as a repayment.

You will buy a motorcar, and since it is worth $ 10,000, you only necessitate to pay $ 3,000 as a refundable deposit.

When you buy the car, the initial deposit will be subtracted from your account which is  1000 $.

 We will call this used margin and we used this term in the forex trading market

Your report will now have $ 2000 unused. We'll call it " available margin ". This sum of money will be the maximum amount you can lose by the transaction.

Hence the car dealership ensures that you are the ace who will suffer the loss if it occurs, and they will not be afraid to pass away because it has in your account the sum of money you can misplace.

When the car dealership orders to sell for $ 12,000, he will deduct $ 10,000 and pay back the full profit and add it to your bill, bringing your account to $ 5000.

If you request  the car dealership to trade  at a cost under the purchase price like $ 8000, he will execute the order and sell the car and then deduct $ 2000 from your account to complete the remainder of the actual car price, and then give your deposit to your account and your account now will have only $ 1000.

What do you also understand?

You see that in any transaction you cannot lose more than the amount in your account that allows you to trade margin.

Here forex trading brokers allow you to trade using the margin trading system and rise up your capital in ration 1:200 and may reach up to 1:2000 times.

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What does forex cashback mean?

Forex cashback is a  payment rebated to traders for every trade done, Forex Brokers share the rebates they earn from every trade made by the forex traders. Whatever they got a loss or win trades.

Cashback is becoming standard for most brokers in the forex market. It’s also becoming a standard tool for traders to maximize profit.

Simply Forex Cashback is the most profitable cashback methodology and also the same with a cashback affiliate program among all cashback traditional methods in the world.

How Does It Work?

When you open a brokerage account through www.invstoc.Com, the brokerage pays us part of their spread or commission earnings for every swap you make as compensation for referring a client to them. We then share the majority of our revenue 80% with you, paying you a cash rebate for each trade you make as thank you for signing up with us. Your spreads and trading conditions remain the same as if you had opened an account directly with your current forex broker. The only difference is, as our client you earn extra cash per trade, making trading through us more profitable than opening direct with the broker. 

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 How to earn more money using forex affiliate programs?

Why should forex trader join invstoc cash back program?

What makes a forex affiliate program more profitable than other traditional one? 

Find the answers by reading the following article 

What is a Forex Cashback Rebate?

 

 

 

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