Let us talk about the Forex market structure. Forex is the combination of sellers and buyers of the currency. They are called Forex operators. They are big banks of different countries including Central banks, the biggest investment companies; pension funds (in majority - north American). The operators trade among themselves different currency, making transactions. The minimum quantity (contract, lot) of the transactions is about 1 million USA dollars. The operators are in touch with the help of a special net, which makes possible to fulfill transactions. The main thing is that the physical movement of money doesn’t take place.
For sure there were moments when you were dreaming about your own shop watching the owner of the shop driving the new Audi? What gives you Forex is much more profitable, effective and safer. The formula of such trade: money - another money - money + profit.
Money is not wasting as there no “physical” transfer going on - it is impossible to steal it. At the same time the complete preservation of the secret of all your affairs; you have no people working on you which are able to steal your ownership and always let you down, especially at the key moments; you don’t need a place, storehouse, fridges, scales and other things; you don’t need to go somewhere every morning, meet someone, beg someone, run from someone.
Receiving of the profit on the money - market is based on the fact the all the rate exchanges always change, shake when you can get profit in any change of the exchange rate.
But why is to sell dollars? You will ask me, it is not right! - And you will be right. What I have described is not a speculative deal. In fact you have earned nothing as the rate of the ruble has fallen down! For the bargain to be speculative and get you profit it is necessary to attract more money that is to take a credit.
So where to take such a sum of money? You come to the creditor and he claims if you get the profit it is wonderful and if you suffer suspense, who will fill them up? For example leave as a deposit the hundredth part, if there is a loss appears you will subtract it from the deposit as the creditor shouldn’t lose money, if you get the profit you will get your deposit after the repayment of the credit. This very deposit is called the Margin claim or the Margin. And the attitude of the credit rendered for the transaction to the Margin is called leverage. Now you see that to perform a bargain with the 100 000 USA dollars lot when the leverage is 100 the Margin of 100 USA dollars is needed.
It is important to gather as much info about Forex as possible. Because this knowledge will help you not to lose much money on Forex trading or Forex investment.
Surely not a single piece of knowledge can be rock solid guarantee against losses, especially on Forex, but sometimes just one Forex book can save you much money.
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