Trading Forex

Foreign currency or collectively, in other words, such as foreign exchange, foreign exchange, forex or FX is also the currency issued by a foreign country as legal tender in the country. Money not only used as legal tender, also developed into a tradable commodity. Own foreign exchange market experienced rapid growth in the early decades of the '70s. As for the causes of foreign exchange grew rapidly among others are:
• The movement of the foreign exchange value of the experiencing significant movement so attractive bagibeberapa certain circles to be involved in the foreign exchange market.
• Business is increasingly global. With the increasingly intense business competition made the company must find new resources that is cheaper, and spread all over the world, giving rise to demand for a particular country's currency.
• The development of telecommunications is so fast with the means of telephone, telex, fax, internet, has given the convenience to market participants to communicate more easily so that transactions are made.
• Gains on foreign exchange markets gained at large tend to increase the desire
various parties tried to gain gain (profit) from foreign exchange movements.



FOREX (Foreign Exchange) or better known as the Forex (Foreign Exchange) is a type of trade / trade transactions that a country's currency against the currencies of other countries involve major money markets in the world for 24 hours continuously.

Forex market movements spun from New Zealand & Australia market which took place at 5:00 to 14:00 pm, continues into the Asian markets of Japan and Singapore which took place at 7:00 to 16:00 pm, to European markets of Germany and Britain which took place at 13:00 to 22:00 pm, to the American market which took place at 8:30 p.m. to 3:30 pm. In a historic development, the central bank of countries with foreign currency reserves that even the biggest can be defeated by market forces forex (foreign exchange) are free.
Foreign exchange rate movements are always changing from second to second is affected by the law of supply (supply) and demand (demand), which always involves a variety of market players who have various interests. Market actors are among others:
• Central Bank. The central bank of a country (such as Bank Indonesia in Indonesia) berkepentinganbterhadap foreign exchange market in order to stabilize the currency exchange rate position the country commonly referred to intervention activities.
• Company. To enhance competitiveness and reduce the cost of production companies always conduct exploration of various resources - resources that lebihn new and cheap. Usually we call this activity with the activities of import. And the company also will always carry out exploration activities to expand the distribution network market of goods and services that have been produced by the company that will eventually arise revenues in other currencies. Usually we call this activity with the export. Because there are import and export activities of these companies sometimes require currencies of other countries with large enough quantities.
• Public or private individuals. Community or individual may conduct foreign exchange transactions caused by several factors. The first factor is the activity of looking for additional income sources, ie by utilizing the fluctuation of foreign exchange rate movements for profit. The second factor is the consumption needs when they are abroad. Examples of course there is a family who traveled abroad say the United States. By the time they will perform the activities of consumption in America then they can not pay with dollars because the currency is accepted in U.S. dollars, so they would not want to exchange money prior to the U.S. Dollar. Another example is a father who will pay for school children in Australia then the father must exchange their money into Australian Dollars in the form first.
• Banks. Banks generally make buying and selling foreign exchange for various purposes, among others, serve customers who want to exchange the money into another form of currency, or to fulfill its obligations in the form of foreign currency.
• Broker / Dealer. Brokers is a company that mediates the foreign exchange transactions. They help us to find a buyer or seller.
• Government. Government conduct foreign exchange transactions for various purposes such as paying foreign debt, receive income from abroad that must be exchanged into local currency again.
According to a survey BIS (Bank for International Settlements - the world's central banks), conducted in late 2004, the forex market transaction value reached more than USD $ 1.4 Billion per day. Thus, the prospects for investment in forex trading today is very good. Benefits play foreign exchange (forex trading) than any other business:

1. There is always a buyer or seller so that we can make a profit through two transactions
direction (buy or sell).
2. The market is open for 24 hours non-stop from Monday to Saturday.
3. Small capital, but can transact in large numbers.
4. High liquidity level, you can take the money / profit you at any time.
5. with advances in technology, you can become a professional trader without alias office work
at home via the internet.
6. Profit in Dollars.
7. Can be run by anyone regardless of age, sex, etc..

What currencies are traded?

All world currencies that have high selling power. Example:

EUR / USD: Euro against U.S. Dollar
GBP / USD: Pound Sterling against U.S. DOLLAR
AUD / USD: AUSTRALIAN DOLLARS against U.S. DOLLAR
USD / JPY: U.S. Dollar against JAPANESE YEN
USD / CHF: U.S. Dollar against the Swiss franc
EUR / JPY: Euro against JAPANESE YEN

Simply put, foreign exchange rates can be defined as the ratio between the value of the currency. Thus, the rates indicate the price of a currency of a country if exchanged for other currencies.
To facilitate the reading rate, there are two things that must be remembered that the first written currency is the base currency (base currency) and currency is a sentence written in the second comparator money (counter currency). Examples of USD / JPY means USD = basebcurrency and JPY = counter currency. At the rate at which the USD as base currency, if there is an increase in the exchange rate, giving the sense that the USD has appreciated (Dollar strength) and the currency depreciates comparison for example JPY (Yen weakened).

In the forex transactions, the purchase price and sale price of a currency expressed in the quotation bid (sell) / offer (buy). Bid is the price level where we can sell the base currency (and at the same time buying the counter currency), while the offer is the price level where we can buy the base currency (and at the same time we sell the counter currency). This means purchasing a foreign currency will be followed by other foreign sales. So in forex trading say there is always a seller and buyer. For example, exchange rate USD / CHF = 1.3154/1.3159 means that we can buy 1 USD with the price of CHF 1.3159, or sell 1 USD with the price of CHF 1.3154. So if we buy the EUR automatically we will sell Swiss francs, or CHF (buy USD by using the CHF = accept USD and the loss of CHF). Similarly, if we sell the USD, we will automatically receive and lose USD CHF.

If the observed exchange rate table above, then there is always a difference between bid and offer exchange where the bid is always lower than the value of the offer. The difference between bid and offer is called the spread. This difference could
occurred because the bank or trader (forex trader) will make profits by selling foreign currency at a price higher than price when buying.

The amount of spread between bid and offer price is shown with a unit of pips or points. For USD / JPY, 1 pip is two decimal places (0.01), while for other foreign currency exchange rate is 1 pip four decimal places after the decimal point (0.0001)