1.What is FOREX ?
FOREX = Foreign Exchange (Exchange Currencies)
2.What is TRADING ?
TRADING = Buying and Selling anythings (Any Goods or Products)
3. What is FOREX TRADING ?
FOREX TRADING = Buying and Selling Currencies | Buying One currency and Selling another currency at a same time. For Example : Consider that, I have USD in my hand, If I want to Buy EURO, then I need to spend (SELL) my USD Currency to get (BUY) EURO Currency.
4. What is FOREX MARKET ?
MARKET = Place for Buying and Selling anythings
FOREX MARKET = Place for Buying and Selling Currencies
Forex Market is the World’s No.1 Financial Market with daily turnover of 8 Trillion USD. The world’s largest NewYork Stock exchange has a daily turnover of only 180 Billion USD.
5.How FOREX Market moves ?
Forex Market moves due to the transactions done by the following firms.
- Major Banks
- Big Interbank Networks (EBS) & Reuters.
- Small and Medium sized banks.
- Hedge Funds, Retail Market Makers, Retail ECNs, Commercial companies.
- Retail Traders (Individual traders)
6. Why Forex Market is possible to make profit in both Up and Down movements ?
Forex market has 2 currencies combined together, called as Currency Pair.
Example : EUR/USD, USD/JPY, USD/INR
Why Forex has 2 currencies combined together ?
Forex Trading = Buying and selling currencies (Exchanging currencies)
While doing One Exchange Transaction, we are Selling One currency (USD) and Buying another currency (EUR) at a same time.
Here totally 2 Currencies are involved in One Exchange Transaction.( Example : Selling USD and Buying EUR = 2 currencies involved for one transaction)
This is the reason, Forex market has 2 currencies combined together.
7. Technical name of Currency pair :
Example 1 : EUR/USD
EUR = First Currency = Base Currency.
USD = Second Currency = Counter Currency or Quote Currency.
Example 2 : USD/INR
USD = First Currency = Base Currency.
INR = Second currency = Counter Currency or Quote Currency.
8. How Forex Market Moves UP and DOWN ?
Let’s consider one example : If there are More people buying one product (example : GOLD),
More Buyers for GOLD => More Demand => Price will Increase Higher (Gold Market moves up)
Forex Market has 2 currencies combined together. Example : EUR/USD
If First Currency (EUR) becomes strong (More Buyers), then EUR/USD Market will Move UP.
If Second Currency (USD) becomes strong ( More buyers), then EUR/USD market will Move DOWN.
9. Placing New Trade order : BUY ORDER & SELL ORDER
Buy Order =Buying First Currency
Sell Order = Buying Second Currency
12. How is it possible to Make Profit in Forex trading at anytime under any situations ?
If First Currency Strong => Market Moves UP=>Place Buy Order =>Make Profit
Second Currency Strong => Market Moves DOWN=> Place Sell Order =>Make Profit
10. Types of Pending Orders :
Pending order = placing the new buy or sell order in advance (or) Pre Booking price.
There are 4 types of Pending orders.
- Buy limit = placing “pending buy order” below the current market price.
- sell limit = placing “pending Sell order” above the current market price.
- buy stop = placing “pending buy order” above the current market price.
- sell stop = placing “pending sell order” below the current market price.
11. Stop Loss and Take Profit :
Stop Loss = If you want your trade order to close with limited loss automatically, then you need to use Stop Loss (SL)
Take Profit = If you want your trade order to close with limited profit automatically, then you need to use Take Profit (TP)
12. Technical terms in Forex :
Bid Price = Selling price
Ask Price = Buying Price
SPREAD = Difference between Buying and Selling Price (or) Difference between Bid and Ask Price
LEVERAGE = It is the option used for buying More Valuable things (or) products with very small money.
Example : If you have leverage of 1 : 100 = You can buy 100$ valuable product with just 1$.
The above details are just the basics in forex trading. If you are interested to become a Successful Forex trader, you should have to learn more about the market.
What does exchange rate mean?
When you exchange currencies, you pay the price of a single unit of a particular foreign currency in your own currency. The amount of money in your currency which is equal to a single unit of the currency in question is the exchange rate for that currency in your country.
Why is Forex so important?
If we take statistics into account, the daily trading in Forex is estimated to be at a staggering amount of $5 Trillion each day. This fact alone makes it the biggest market with the most liquidity among any financial marketplace, beating stock exchange trading to a sorry second place. Great Britain holds the biggest share of the Forex markets, with about 40% of all trading happening in London. This happened because in 1979 all foreign exchange control methods were cast off in the country. And there was also a very good infrastructure to induce currency trading. The spine of global investment and international trading is built up on Forex. Forex plays a vital part in supporting exports as well as imports to any country, without which, it would have been worse off. These imports/exports in turn will help in accessing resources previously untapped and create greater demand for services as well as goods. If you were the head of a multi-national company, your prospects would be quite limited and hinder growth. This leads to a stagnation or slowdown in the global economy.
Examples of a trade involving Forex
Let's take it that you are in the USA and want to play with the Euro. If you believe the Euro will rise in the future, then common sense indicates that you will buy Euros in exchange for Dollars based on the current exchange rates. However if you have some Euros in hand and think their value will decrease in future, you'll exchange them against the Dollar, thus making a profit. But however you should always keep it in mind that Forex trading is subject to a high risk of loss, the factors of which are beyond your control. Forex trading takes place round the clock and if you're financially savvy and buy/sell at the right time, you have a good chance of walking away with a bundle.
Why trade in currency?
Some of the key reasons why Forex is so popular are;
1. Most firms will not charge commissions but only ask for the bid/ask spreads.
2. Convenience of trading on a 24 hour format, especially in today's modern times.
3. Leverage trading is also possible; however this can magnify your potential gains or losses.
4. You can narrow down your focus to the "best" currencies, instead of getting lost in the stock market with innumerable options that might mislead you.
5. It is accessible to the common man; you really do not have to be a rich man to be a player in the Forex market. A lot of money is not necessary for starting off.
Behind the scenes action
The Forex market works through many financial institutions and is operative on many a level. The banks which are "invisible" so to speak go to a lesser number of financial firms which can also be called "dealers" as they are referred to in common parlance. These dealers take an active part in exchanging large quantities of foreign currencies based on the exchange rate. As this takes place behind the eyes of the trader, in this question, you, this mode of market is also referred to as "interbank" market.
Major players in Forex
1. Banks: The biggest banks in the world all depend on Forex trading for a large part of their business. They also ease Forex transactions for customers and indulge in speculative trading from trading desks.
2. Central Banks: These are major players in Forex markets. The open market operations as well as the policies of interest rate play a big part in influencing currency rates. I say this because any actions taken by the central bank will act in the interests of the nation by increasing or stabilizing the economy.
3. Investors/Hedge funds: You'll find a lot of investors trading currencies in order to bulk up endowments and pension funds. Also, hedge funds may indulge in speculative trades at times.
4. Corporations: Those firms engaged in import and export will have to rely on Forex to ease and facilitate transfer of goods as well as services.
5. Individuals: The Forex market gains popularity by the day among the gentry, who after consultation or research, decide to try their hand at Forex.
Forex opportunities for you
If you have not tried your hand at Forex yet, you can jolly well give it a try. All you need is a sound geo-political knowledge, coupled with some latest feeds on the exchange rates. This is because the exchange rates are dependent on many factors like rate of interest, flow of trade, the volume of tourism, economy of the country, and a lot of other factors. So you have to think carefully before starting off:
COMPARING BETWEEN BITCOIN, ETHERUM,RIPPLE, and LLITECOIM
Bitcoin was the first. Since its release in 2009, it's become the most famous, established and valuable cryptocurrency. But it's not the only game in town.
And in 2015, Ethereum made its debut, incorporating bitcoin's basic blockchain premise and Litecoin's pursuit of faster transaction speed, but adding a few of its own twists -- including the ability to process little chunks of code, called "smart contracts" -- and on its virtual peer-to-peer network as opposed to a dedicated server or mining rig.
Ripple's market cap now exceeds $40 billion. Ripple
Coinbase's support for bitcoin, Litecoin and Ethereum -- as well as Bitcoin Cash, a new branch of the bitcoin blockchain created in August 2017 -- helped install and keep them among the most visible and well-capitalized cryptocurrencies. Rounding out the top 10, in terms of market capitalization, is a dynamic shortlist that has included established coins and upstarts like Ripple, Cardano, Neo, Stellar, Eos and IOTA.
For the purposes of introducing some of the prevailing concepts behind the growing population of cryptocurrencies, we'll take a closer look at the technologies behind Litecoin and Ethereum, how they compare to bitcoin and what they each bring to the table for prospective investors, miners and traders.
The top six cryptocurrencies represented roughly $315 billion in market capitalization as of Feb. 12, 2018.
Litecoin 101
Litecoin is closely based on bitcoin -- they're built on the same underlying code -- but with a few distinctive tweaks. The central difference is that Litecoin is mined using the Scrypt algorithm, which is rooted in mathematical computations that are simpler than those used by bitcoin's SHA-256 algorithm. As a result, in contrast to the specialized, super-expensive, energy-intensive mining rigs required to mine bitcoin, you can mine Litecoin with a decent laptop or desktop PC, especially if it's tricked out with a powerful graphics card.
Litecoin
And because Scrypt is less mathematically complex than SHA-256, Litecoin mining is way faster than bitcoin mining. A Litecoin block takes only 2.5 minutes to hash, compared to the 10 minutes it takes to hash a bitcoin block. So Litecoin transactions are also faster to process and confirm.
Ethereum 101
Like Litecoin, it's based on the same fundamental blockchain concept as bitcoin, with blocks and hashes and such, but Ethereum adds its own distinctive twist. Funded in 2014 through an initial coin offering, Ethereum fancies itself "an enormously powerful shared global infrastructure" that, in addition to serving as a digital currency, runs special applications called "smart contracts."
This collective, distributed computing network, called the "Ethereum Virtual Machine," can be, in a sense, rented out. Participants who consume computing power pay for it with tokens, called Ether; those who contribute processing power can earn them. Of course, buyers and sellers can simply trade Ether independently of these activities.
Consider that bitcoin mining is akin to thousands of chefs feverishly racing to prepare a new, extremely complicated dish -- and only the first one to serve up a perfect version of it ends up getting paid. In the Ethereum kitchen, miners serve as the restaurant's landlord, compensated for providing the infrastructure so that Ether chefs can invent new types of cuisine.
In fact, a group of companies and universities has formed a nonprofit expressly to legitimize Ethereum; promote it as an open-source platform and not a commercial enterprise per se; and develop and support those applications that run on it. And these are not rinky-dink startups -- we're talking about major technology players like Intel and Microsoft and financial behemoths like JP Morgan and Credit Suisse.
Which cryptocurrency is the most valuable?
Bitcoin remains the most visible and frequently traded cryptocurrency. After a remarkable surge in November 2017, it crested at just shy of $20,000 in late December 2017, and after settling in around $15,000 for a few weeks, shed another 50 percent of its value after South Korean regulators publicly mulled banning trading. The price of Litecoin, sometimes referred to as the "silver" to bitcoin's "gold," followed a valuation trend similar to bitcoin and now sits at around $160. Though all three have increased in value during the past 12 months, Ethereum has charted its own distinct path, spiking in June 2017 and surpassing $1,000 in early January 2018.
Which one's the best for you?
If only it was that easy. No one knows whether any cryptocurrency will increase in value -- or even be around in a year's time (though we think the ones outlined in this article will check both of those boxes). None of them are regulated (yet) and only individuals with the highest capacity for risk should get into the cryptocurrency market. That noted, there are significant differences among these three that could be used to form a rational basis for investing in or mining one over another.
Bitcoin is the mainstream choice. If you're looking for a cryptocurrency with first-mover advantage, unmatched popular visibility and the highest market capitalization, it's a no-brainer. On the downside, it's now nearly impossible to mine profitably, incredibly energy-intensive and, after rising more than 1,000 percent over the past year, could have expended most of its potential for growth. (This is debatable. No one knows anything.)
Litecoin offers its own advantages. Its creator is a known and active entity in the cryptocurrency community. It has a capacity for faster transactions -- a potential advantage in and of itself, which also provides for a different set of use cases than bitcoin. And it still offers the potential for profitable mining, unlike bitcoin.
The Enterprise Ethereum Alliance brings together Fortune 500 companies, research institutions and tech companies and startups.Enterprise Ethereum Alliance
Ethereum has the backing of some boldface names -- which could be a benefit or drawback, depending on your opinion of the modern financial industrial complex. It has the potential for intrinsic value like Litecoin or bitcoin but also more obvious commercial applications as well. And, like bitcoin, it has spawned hundreds of other coins that have been built using its underlying blockchain technology.
Regardless of which sounds the most appealing to you, do your research before investing in any of these cryptocurrencies.