What is Forex Trading

What is Forex Trading
Foreign Exchange trading is about a business, your own private business. Forex market is the biggest market in the world which does not recognize borders, governments and it is absolutely not regulated at all by any authority.

It offers you the most flexible way of managing your own business with total freedom of place and time. This market of exchange has more daily volume, both buyers and sellers, than any other in the world. Taking place in major financial institutions across the globe, the forex market is open 24-hours a day

We call it an investment because it allows you to make decisions base on many factors like the country’s economical fundamentals, political environments, technical indicators and etc.

You earned interest rate returned on the currencies you purchase in exchange with a currency you sell if the other currency is yielding less than the others.

Buying Selling

In the forex market you either buy or sell currencies in order to earn a profit. When buying currency and the price appreciates in value, you will earn a profit by closing the position. Closing this position actually means that you are selling the currency pair.

For example, buying EUR/USD at 1.3120 and selling EUR/USD at 1.3180.Thus by trading currency pairs the rate of worth of one currency pair against the other is established. This means that a currency of a country has value only relative to the currency of another country.

Quoting

When looking at currencies we look at the first currency as the base currency and the second one as the counter or quote currencies. We refer to them as currency pairs as they are always quoted in pairs.

Like all financial products, FX quotes include a "bid" and "ask". By quoting both the bid and ask in real time, MIF ensures that traders always receive a fair price on all transactions.

For example, EUR/USD may have a bid price at 1.3128 and an ask price at 1.3133.

Margin

The margin deposit refers to somewhat like a good faith deposit to ensure against losses accumulated through trading. Thereby the margin requirement allows traders to hold a position much larger than the account value.

The MIF Trader has this capability thus allowing for traders to trade with a leverage which can be customized by us. This means that traders can hold a position that is much larger than the account value.