Tijekom srednjeg vijeka, kada su novac razmjenjivali preko međunarodnih banaka, the idea of Forex began. At the time, it was mostly Europe that spread its currency through itself and the Middle East.
When in the year 1875, one of the most important events took place i.e. The Gold Standard Monetary System was created, it provided the idea of exchange rates, after which the dollar currency was coined as the world principal currency, and the rest is history.
What Is Forex as It Stands Today?
Forex or FX is a hybrid concept relating to overseas currency and the exchange thereof. It involves a simple process of exchanging one currency into another for multiple reasons such as trade, e-commerce, tourism to name a few. As per recent online statistics, the median turnover was more than $5 trillion in daily forex trading. Read about it in the report on this website.
These markets tend to be the largest and most ‘liquid’ resources within the market exchange world. U današnjem svijetu, this concept has grown to the largest extent where anyone can trade any currency from any country, na primjer, EUR/USD ili USD/JPY i GBP/USD which are three of the most used ones.
How Does Forex Works?
The main place where this is done is at the forex exchange markets, which are in operation 24 hours a day, from Monday to Friday. Međutim, nowadays it is also done electronically via OTC or over-the-counter with countries all over the world. The basic idea of this practice is based on waiting for one currency to become stronger than the other.
The rate of return or ROI tends to be smaller than stocks or bonds, but sometimes you can get lucky and by increasing the return, using strategies, na primjer, using borrowed capital, you can receive a higher amount than the average. The people that benefit the most out of this type of trading are the active ones.
Because currencies need to be traded to conduct business within neighboring countries and businesses, it is a fundamental aspect that caters towards running any economy successfully. The major financial sectors around the world include countries across all time zones – New York, London, Tokyo, Zurich, Frankfurt, Singapore, Hong Kong, Sydney, i Paris.
If, na primjer, you live in the U.S. and your business primarily sells different types of olives from Italy. Either you or the company you buy from will need to pay for the goods in Euro’s (EUR).
U ovom slučaju, vas, as the importer will need to exchange your Dollars (USD) into Euro via the exchange rates. It is a similar theory to anyone who wants to do some traveling in their life-time, you will need to exchange your monies to the currency of the country you will be visiting, equivalent of the exchange rate at the time.
The First Step for AForex Beginner
As a novice in such an area, to start this form of exchange and investment you need to keep a few things in mind. Reading up on ithttps://www.investopedia.com/ask/answers/08/what-is-foreign-exchange.asp, doing personal research, doing your homework about the ins and outs, and if possible, speaking to someone who is currently doing it or has experience in it are all first moves to make when initially taking the first steps.
As already mentioned above, this is a means of making money, for an active trader. If you are more of a passive trader, this may not be the best option for you. The ways on which one can make a profit is by the low trading costs, the high leverages, and the availability of diverse markets. Not to mention currencies are a lot less unpredictable in comparison to stocks.
What Resources Are Available to Learn From?
The number of different resources to learn all about Forex is in the thousands. Međutim, only a few of these are worth investing in and putting your time in to read and go through.
Forex trading books are a good way to start learning. Buy one, spend a couple of hours on each chapter every day, make some side notes in the textbooks, or have your diary for just this purpose to make notes in. There are a few things you need to learn and it won’t come quickly. One of these is the forex language itself. Do you know what ‘Bid Price’ is? Or ‘Base Currency”? or perhaps ‘Spread”?
Join an Online forex chat forum: Another means of learning are joining an online forum specifically geared towards this type of trading. You can ask any questions, discuss any topics and there are some well-known experts in the market that give their advice there for free. it’s worth a shot.
Hire A Broker: The third option, if you have some surplus of money, is to hire a broker, independent or from a brokerage firm. But make 100% sure you have investigated the person or the firm you are about to hire, to handle your capital. Također, make sure that the one you are looking for offers this service, as not all firms offer forex trading to their customers. Some also have a commission-based scheme so make sure you do a comparison of a few to see which ones have the least charges and commissions to them.
As with all types of trading, when it involves your cash, it is a good idea to keep in mind that it will at a risk. Sometimes you will lose some and sometimes you will gain some – that’s just the name of the game.