About Forex

 

What FOREX is about?

FOREX – is the international financial market used for foreign currency exchange operations. This is the largest of the world’s financial markets: by late 2013 its daily turnover was estimated at USD5,300bn level, which constituted over 30 per cent of the annual GDP of the USA – the world’s largest economy. Participants of this market are quite diverse: from the world’s largest banks and corporations to individuals acting as private traders.

Who are FOREX market dealers?

FOREX is the decentralized market; its participants make deals between each other either directly, on world’s exchanges or other trading platforms, or with the help of intermediator firms aka “dealers”. These firms also assist in closing of deals with derivative financial instruments having quotations of currency pairs as their basic asset.

There are dealers specializing mainly on working with private individuals. It is through these companies private traders trade on the FOREX market, and these companies are the members of our Association.

How you can one can earn on the FOREX market?

In general, earning on trade in currencies on the FOREX market is not much different from earning on trading in any other commodities or assets. A trader buys or sells one currency for another one (for example Euro for USD) and after some time he/ she sells the purchased currency of buys out the sold one. If the rate of one currency grew against another one within this time period (or fell in case of selling), the trader would receive the income.

What is the margin trading?

FOREX market dealers provide their clients with the so called margin trading possibility. In this case the client makes a money deposit with the dealer and the dealer, in its turn, provides the client with the sum considerably increasing the size of this deposit for trading. Income or losses from operations are added to or are withdrawn from the client’s account within the sum deposited by the client. Due to this mechanism, the client receives possibilities to operate with considerably larger sums than he can afford to take out of his/ her pocket and to earn more, respectively.

It should be noted that with margin trading a dealer doesn’t make any currency exchange operations as such. Instead a non-deliverable transaction is made, when the client makes a stake for the quotation change of this or that currency pair (e.g., he/ she bets for its growth) and receives an income or loss depending on these quotations’ change.

Which profitability can be expected from FOREX market operations?

Due to the margin trading the FOREX market is potentially able to bring considerably higher profits than traditional instruments used by private individuals, such as bank deposits. Profitability of a successful FOREX-trader may vary from 5% to 100% per annum. However, FOREX trading is associated with a certain risk level as the trader can lose the deposited money.

How to start working on the FOREX market?

For this you should sign a contract with one of the FOREX market dealing firms. As in case of work with any other financial organisations and consultants, when choosing a dealer one should pay the attention to how long it has been operating on the market, its reputation and market share, in order to avoid signing any agreements with frauds. The largest and most reliable FOREX market dealers in Ukraine are the members of our Association.