What forex? part 4

Knowing that Forex is a very volatile market, and that it is current to notice daily variations of more than pips 100, one understand(include) fast that the gains can accumulate in an extraordinary speed!! A small calculation will be more speaking:


- with 2 dollars, we thus buy a 1000-dollar lot of EUR / USD. The price passes from 1,2545 to 1,2645, we thus benefited from an increase of pips 100, that is a 10-dollar profit (10 centimes x pips 100). This profit, brought back(reported) to 2 dollars put in sets, represents a 500 % performance!! In the day!!


- another example: if we use entirely 1000 available dollars and control lever of 500, we can buy 500 1000-dollar lots. If we always base ourselves on a variation of pips 100, the profit will be 10 dollars by contract, that is all in all 5000 dollars by having investing 1000 dollars!! Always in the day!!

A last thing(matter) to be known is that for a pair of given currency, the cost price and the sale price differs:

Example: EUR / USD = purchase 1,2545 / blows = 1,2543

This difference, which we name spread, establishes(constitutes) the payment for your broker. In the practice, it means that when you buy a prize(lot) of EUR / USD, you begin with a loss equivalent to the spread, and are thus a beneficiary only from an increase equivalent to your spread.

Most of the brokers propose spreads of 2 or 3 pips on the EUR / USD. But attention, many also practise prohibitive spreads, pips 5 or 6, or post(show) spread of 1 pip by forgetting to specify that these sound variables, and more often close to 5 pips than to 1...

Now that you likened the basic vocabulary of Forex, as well as its general functioning, you really go to begin to learn how to gain(win) some money(silver) on Forex...

What is forex part 3 !

It is also necessary to know that the currencies are sold themselves by lots. Most of the brokers propose lots of various sizes, going from 1000 to 100 000 dollars.


But then, it is necessary to have at least 1000 dollars to invest on Forex? No! And it is there that the leverage intervenes...


Indeed, the broker Forex proposes "leverages" going from 50 to 500. Yes, but what a leverage?
To make simple, let us take an example:

We have 1000 dollars in account, and benefit from a leverage of 500. It means that we can invest on amounts representing 500 times what we have in account...

In this example, with our 1000 dollars, we can invest(surround) on 500 000 dollars (1000 x 500)...




And it is thanks to this leverage that Forex takes quite sounds sense(direction). It is this leverage which makes of the forex a speculative market, and not its volatility. Ineffective of control lever, the forex is moreover one of walked(worked) the least volatile of the world...



    * Become rich with Forex...



Oh yes, but it is not the first time which we suggest you becoming rich. And we imagine well that one needs a little more to convince you...
Even there, let us take an example:

- when to buy you a 1000-dollar lot with a leverage of 500, you mobilize only 2 dollars (Indeed, 2 dollars multiplied by the leverage of 500 make 1000 dollars).


With a 1000-dollar prize(lot), a variation of a pip represents 10 centimes of dollars (And 1 pip represents 1 dollars for a 10 000-dollar lot, and so on).

Part 2 What is Forex ?

 The functioning and the basic vocabulary

When we invest(surround) on the market of Forex, we speculate on the evolution of a currency(slogan). The currencies(slogans) are always esteemed by pairs. Their price(prize) displays generally with an integer followed by 4 decimals:


Example: EUR / USD = 1, 2545 (1 euro is worth 1,2545 dollars)



Here, when we buy of the EUR / USD, we bet on the increase of the Euro with regard to the Dollar. In other words we plan that the European economy will have better health than the American economy.

If we wish to bet on the decline of the Euro, it is enough to sell of the EUR / USD. It is indeed possible to sell a currency(slogan) which we do not possess. The mechanism under jacent is rather complex, but in the practice it means simply that you click "sale" instead of "purchase", and that you win if the pair of currencies(slogans) falls.


The variations of the pairs of currencies(slogans) are generally expressed " pips " there. When the EUR / USD passes from 1,2545 to 1,2565, one

What Forex ?

What Forex?

Forex, contraction of Foreign Exchange, indicates(appoints) the foreign exchange market, in other words the " stock exchange" of the currencies.

Forex such as we know it today was born in 1973 when the international community subscribed to the regime of floating exchange rates. Before this date, the foreign exchange rate was fixed with regard to the dollar, according to the agreements of Bretton Woods of 1944.

This profound modification of the international monetary system allowed to bring to light tremendous opportunities of investment, thanks to the variations of the courses(prices) of currencies. Indeed, in spite of its young age, Forex very fast became one of the biggest markets of the world, with a daily volume of transactions(deals) reaching(affecting) the 3000 billion euro...