dhanpreet Posted October 22, 2010 Share Posted October 22, 2010 Forex Trading and risk You may often heard the term forex and forex trading, especially now that many new brokers who are actively promoting so-jealous bid to "play" forex can be easily found, both in the real world let alone advertising in cyberspace. Unfortunately, many people who do not really understand what is meant by this forex trading. Even many who because of the lack of balanced information, finally got a negative impression about forex. This is compounded by various news slanted about this activity, ranging from the number of bids in forex investments with the lure of profit is teasing without a correct understanding of the risks which then ended in disappointment and accusations of fraud. Well, before we judge good and bad forex trading, there is little good we know, what forex trading actually is, how it works and how risk What is forex trading? Ok, we take a look first, what is forex trading actually is? Forex trading can be defined as an investment instrument in the form of foreign exchange trading in pairs. I deliberately chose the word "investment instruments" because I want to emphasize that in forex trading, we will work as an investor, not a gambler (gamblers). That is why I like to feel uncomfortable when someone uses the term "playing" In forex trading forex, we essentially are doing business investment, not doing gambling game. Rationally, we will only invest after understand well how the possible benefits and risks. So, if you consider forex trading as a short way toward getting rich ... I recommend: do not do the forex trading is Indeed, forex trading is one way to monetize the virtual world (online), but everything can be achieved if we have a basic understanding of the true, not only with speculative capital. Strong willingness to continue learning, including learning from failure, the main prerequisite for starting to learn forex trading. Ok. We proceed on the basis of this understanding in forex trading. Most people who heard about forex trading will ask: is it the same as money changer? Mmm ... well, you could say the same is the basic understanding, because we will benefit from the difference between the buying and selling price. Owh ... then, what's the difference? Look, I will try to explain briefly The first difference: if buying and selling at the money changer, no physical movement of goods while in forex trading there is no physical movement of goods. All transactions are conducted only in the form of contract. Unlike the others again, if money changer, if we do forex trading, for example, we buy U.S. $ for $ 100,000 with the price of say USD. 9500 / U.S. $, then we wait until the selling price rose to USD. 9.700/US $, we will get the benefit of a spread (9700-9500) dollars multiplied by the volume traded (100,000) that is equal to 20 million rupiah. In forex trading, we recognize the so-called margin trading, where we simply provide collateral to the broker for a certain percentage of the volume of transactions, such as 1%. 1% of this will be what we call leverage or leverage. More detailed understanding of leverage, then we will discuss it later. In the meantime, we quite understand that with leverage, allows us only pledge a certain percentage of the value of the transaction to be able to perform the transaction (the sale).Of course this is very beneficial, because then we can save this capital for forex transactions. Risks in Forex Trading Ok. Now we get into discussion about the risks in forex trading. I always recommend to prospective traders to understand the risks in forex trading first before get into this forex world For investors who are rational, we must always compare between the risk with the possibility of profit we can get. Do not let us make an investment without the risks of investment are well aware that we do. In forex trading, can basically say that we do risky investments commensurate with the possibility of profit we can get. Well, the duty of a trader to minimize this risk and maximize profits with a variety of ways, including use of analysis and trading system that can be accounted for. There are many misconceptions that already spread among the public about these risks in forex trading. In fact, I often hear people assume that forex trading can cause a trader to engage the loan in an amount not less. Here I feel the need to align the understanding of this matter doubtful debts before. I must emphasize, in relation to traders with brokers, there is no relationship accounts payable. So we are trading at a broker, we do not do debt contract with a broker. That there is, we make a deposit at the broker, whose numbers in accordance with the ability of each trader. There are even brokers who deposit a minimum of only $ 1. Well, the maximum loss that can be suffered by a trader is only for deposits that have been done. That is, if we make a deposit of $ 5, the maximum loss we yes that's only $ 5. Extremely, regardless of how our trading is mess, like a bad day, we have deposited capital is missing ... Of course later we will discuss in next post, the basics of analysis that we can use, so we understand how trading in a way that can be accounted for so that the risk of capital loss that we avoid as much as possible. Ok. got here I hope you've had a fairly a big picture of how and risks in forex trading, so if you are interested to explore this forex world, you will start with a correct understanding of the risks and hope. Quote Link to comment Share on other sites More sharing options...
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