The foreign
exchange market (Forex) is a nonstop cash market, currencies are traded in
which countries, through intermediaries, of course. The foreign currency
purchase and sale on an ongoing basis and at the same time over a local and
global markets and increase investment traffickers or decrease in value based
on currency movements. Can the foreign exchange market conditions can change at
any time in response to events in real time.
The main
catalyst for currency trading for private investors and gravity about trading
in foreign currency in the short term are: trading 24 hours a day, five days a
week, with the entrance does not stop for traders in foreign currencies in the
world.
Investor goal
from trading in foreign currencies and make a profit from foreign currency
movements. In pairs are traded in foreign currencies always. For example, the
euro / US dollar exchange rate on August 26, 2003 price was 1.0857. And also
referred to this figure "of foreign currency at a price" or "price"
only for short. If the investor had bought 1000 euros on that date, it would
pay US $ 1085.70. And a year later, the price was 1.2083, which means that the
value of the euro (the numerator of the ratio of the euro / US $) has increased
its relationship with the US dollar. The investor can now sell the 1000 euros
to receive instead of US $ 1208.30. Thus, the investor will have US $ 122.60
more than they began it since years ago. However, to determine if the investor
did a good investment, one must compare this investment option with alternative
investments.
At least, you
should compare the investment returns on the investment returns
"risk-free". An example of risk-free investment is US government
bonds for the long term because there is almost no possibility of failure to
repay, as if the US government go bankrupt or be unable or unwilling to fulfill
the commitment of the religion. (Please note that past performance is not
indicative of future performance).