Trading is one of the most common and effective methods of making money on the Forex exchange, while currency transactions are carried out through the mediation of a brokerage organization. Both private traders and state and commercial banks, as well as investment funds, take part in the trading process. The participants buy currency for different purposes, but the result is the same: buy as cheaply as possible, sell as expensive as possible.
To become a trader you need:
- Install a trading terminal on a computer, be tested on a demo version of a Forex dealer to test your own strengths and theoretical knowledge.
- Choose a broker and register an account on their website. Then open a deposit that will guarantee the fulfillment of obligations in Forex trading.
The trader's trading terminal will display all currency transactions. To successfully buy and sell, you need to have certain knowledge and practical experience, as well as be able to collect statistical data and analyze them.
When using leverage, you can increase earnings at times. In this case, for trading, the trader takes borrowed funds from the broker that exceed the deposit amount by 100 times or more. At the same time, the trader's own money remains as collateral until the order is closed.
Betting practically does not differ from trading, with one difference that during the transaction there is no buying and selling process, but bets are made on changes in the exchange rate. Before trading, a trader chooses two currencies, which are called a currency pair: base and quote. The task of the trader is to predict the change in the exchange rate of the quote currency in relation to the base one:
- If there is confidence in the change in the rate of quotations upwards, then you can open a deal for "acquisition".
- If the trader is waiting for a decrease, then to “sell”.
- If the movement of quotes was predicted correctly, then the money will be transferred to the trader's account at the end of trading, if it is wrong, then it will be written off. You can withdraw a deposit from a broker at the moment when all transactions in the trading terminal are closed.
Investing in a trader or PAMM accounts
If a novice trader is not confident in his abilities, then he can choose passive types of earnings on the Forex exchange. At the same time, a participant in exchange trading entrusts his deposit account to another, more professional trader, becoming an investor.
- Trust management is a type of interaction between an investor and a successful trader, in which both parties sign a cooperation agreement. The investor provides a deposit account for trading in trust, and the trader undertakes to transfer the profit from transactions to the investor's account, taking his percentage or a fixed amount as payment.
- PAMM accounts are a type of trading investment in which several investors transfer a certain amount to a PAMM account. The trader uses investments and own funds to make trades. If successful, investors receive a profit in accordance with the amount entered in the order.