The introduction of forex trading

The actual existence of forex trading has long existed since the discovery of techniques to convert a country's currency into another country's currency. However, there are new institutions after the establishment of the arbitration body futures contracts (futures). An example is the IMM (International Money Market-founded in 1972) which is a division part of the CME (Chicago Mercantile Exchange-specific product handling perishable commodities). Another example is the LIFFE (London International Financial Futures Exchange), TIFFE (Tokyo International Financial Futures Exchange) and so on.

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The velocity of money is happening in the forex market to reach US $ 5 trillion per day (survey BIS-bank for International Settlement- in Setember 2008). This amount is 40 times larger than the velocity of money on such commodity futures exchange or any other stock market in each stock exchanges of any developed country! This means that the trading volume of that size, this market are highly liquid (liquid), and trade controls can not be held by only a few parties who have big capital. Currency movements is entirely dependent on the market. There are many large or small players in forex trading, but none of them were able to control the movement of foreign exchange rates.

Frequently traded currency is the currency of developed countries such as the US dollar (USD), Japanese Yen (JPY), Swiss Franc (CHF), British pound (GBP), Australian Dollar (AUD) and the Euro (EUR). All currencies are traded in pairs (called pair), for example, EUR / GBP, CHF / JPY and so on.

Then where did I gain from this investment? In simple, the benefits of this investment derived from the value of the difference when we buy and sell back the currency of the country concerned. For example, in April Amir buy Dollars at the exchange rate of Rp. 8500, - per dollar as much as US $ 1,000. So at the time of purchase this currency Amir to pay as much as Rp. 8500, - x 1000 = Rp 8.500.000, - Then in May, the exchange rate of the dollar against the rupiah strengthened to Rp. 9500, - per dollar, the net profit that Amir earned when he sold back its dollar amounts: (9500-8500) x 1000 = Rp. 1.000.000, - Easy and simple is not it? And because the average time required to buy and sell back the currency in question is usually not more than one month, then the forex trading are classified as short-term investment.

Perhaps such questions will arise from you: "Then what's the difference forex trading by buying and selling at the money changer?" There are some striking differences between trade forex with money changer. In addition to the pair traded foreign currency is the one with the other foreign currencies (at money changers are usually paired with Rupiah), forex trading does not involve physical trading. And more importantly, because it does not involve physical trading, forex trading can be run with system margin or collateral (margin trading).

For example if I want to buy US $ 10,000, then the margin trading system with me enough to spend 1% of its course is $ 100 as security. But the benefits I get from the appreciation (increase) the US Dollar is equal in value to US $ 10,000 which I bought. Very simple and because it does not involve trading in physical form (investors do not hold the currency bought or sold, only evidence of their transactions only), then the guarantees given can be so small that only 1% of the amount that would be purchased.

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