What Is Forex For Beginners?
For beginners, the Forex market is exciting as it leverages the most popular currency pairs, stocks, commodities and even assets and other instruments of the global markets traded on the world's largest exchanges.
There are countless investors who are new to the Forex market or have decided to start, who want to take advantage of the potential earnings opportunities in the Forex market but cannot produce the right investment strategies. I would like to briefly mention the information that will help these investors to know the Forex market correctly and increase their Forex literacy in the main framework and even provide Forex trading experience.
For beginners, I will give a general introduction to topics such as “What is Forex”, “What are the features of the Forex market”, “What are the advantages and disadvantages of the Forex market”, How to open a Forex account and what to consider when choosing a brokerage firm? How to gain Forex trading experience. You can get more comprehensive information about developing Forex literacy and trading experience free of charge from our experts, Forex training kits and webinar archive.
What is the Forex market?
As it can be understood from the definition of Forex, the Forex market is a market created for international banks to make foreign exchange transactions among themselves faster and at lower costs. On the other hand, this market, the foundations of which were laid in the 1970s, has become the largest and most liquid financial market in the world, worth 5.5 trillion dollars, where numerous products are traded in a wide range today.
In the Forex market, today all transactions are carried out online with the help of the banking network of the world's largest banks and financial institutions. Investors can participate in the market, make transactions and manage portfolios online from anywhere with an internet network, even from the farthest corner of the world.
The Forex market is a market that is open 24 hours a day, 5 days a week, unlike organized exchanges. The transactions, which started with the opening of the Australian Sydney stock exchange on Sunday night, continue through Hong Kong, Singapore and Tokyo, then the Middle East, and the European and American markets. With the closure of the New York Stock Exchange on Friday, the Forex market is also on vacation. Thus, investors have the opportunity to take action against all global and local developments that will affect the financial markets at any time of the day.
What are the instruments traded in the Forex market?
Although currency pairs form the roof of the Forex market, precious metals such as gold and platinum; metals such as aluminum, copper; agricultural commodities such as cotton, soybean, corn; energy commodities such as oil, gas; a wide variety of commodities with different characteristics; Shares of very powerful companies in global markets such as Facebook, Alibaba.com, Twitter; world stock market indices such as S&P, Dow Jones, Dax; In summary, hundreds of financial instruments with different return and risk levels are traded at attractive terms.
Who trades in the Forex market?
Forex market is the world's largest over-the-counter financial exchange with the largest investor base in the world. Institutional and individual investors, including hedge funds, insurance companies, banks, from nearly 200 countries in a wide range of world geography, trade in the Forex market.
To put it more clearly, institutional and individual investors who want to trade speculatively or for hedge purposes in popular instruments of global markets with high risk appetite and leverage in flexible trading conditions are natural members of this market.
- The world's most liquid financial market,
- 5 days / 24 hours open market,
- Two-way operation possibility,
- easy access to the market,
- Leveraged trading opportunity,
- Inability to manipulate prices,
- Free practice opportunity in Forex demo account,
- Free Forex training support,
- No costs such as commissions, hidden fees.
What are the disadvantages of the Forex market for beginners?
The Forex market is a leveraged derivatives market; While it offers high profit opportunity with less savings, it also includes high loss risk with wrong trading strategies. In the leverage system, the opportunity to gain and the risk of loss are the same.
Forex market is an international derivatives market, not having enough knowledge and experience about the functioning of the market and the market behavior of the traded instruments can turn into a disadvantage.
Investor psychology can be a disadvantage for inexperienced traders who are new to the Forex market. With the advantage of the leverage system, large volumes of transactions can create a sense of panic and cause losses.
How to choose a forex brokerage firm?
The most important criterion in the selection of the brokerage house to open a Forex customer account is to be selected from among brokerage houses that are subject to Capital Market Laws and have leveraged trading brokerage licenses.
Why is a licensed brokerage firm important?
As we mentioned before, the Forex market is an international market, access to the market is possible with a Forex client account opened in any brokerage house operating in any country in the world. This situation creates grounds for investor grievances, because the investor is subject to the laws of the country where the brokerage house opens an account, and the protection of investor rights is difficult in terms of distance and use of legal rights. It is also a handicap that financial markets do not operate within the framework of the same laws in every country.
Brokerage houses that want to provide leveraged transaction brokerage services have to operate according to certain criteria in many subjects such as equity capital, technological infrastructure, employment of qualified personnel in the field, fields of activity, service standards.
With the regulations, it is aimed for investors to be stronger in competition with global players and to trade in a safe and transparent market. Therefore, it is very important for the Forex investor to choose among licensed institutions.
GCM Investment, one of the leading and award-winning institutions of the sector, is a large authorized brokerage house with its strong financial structure, world-class technological infrastructure and expert professional staff.
How to open a Forex account?
Opening a Forex customer account is subject to a certain procedure as required by the laws of the CMB and attention is paid to the fact that the investor has Forex trading experience. In this context, customers who are going to open a Forex account for the first time are required to practice fifty trades in the Forex demo account for at least six days and fill out the Forex eligibility form. A Forex account is opened with the investor's identity statement and signing of the Forex customer contract kit.
How to trade Forex?
With the opening of the Forex customer account, the investor can log in to Forex trading platforms online via the web address of the brokerage house with the customer identification information and password given by the brokerage house. The position is opened by selecting the instrument, lot size and expectation direction on the trading platform and matching the order in the market. A rich variety of orders supports the implementation of many strategies such as creating pending orders, determining take profit and stop loss levels, and creating chain orders. With the closing of the opened position, the profit/loss is reflected in the customer's account.
Trading in the Forex market is very easy, but for the success of the transaction, it depends on financial literacy, keeping up-to-date with analysis and reports, trading experience, effective collateral management and the right investor psychology.
With the mission of a conscious investor, GCM Investment customers can benefit from all trainings, seminars, webinars and publications for the correct recognition of the Forex market and the development of financial literacy, free of charge.
..............The information contained in this article is not investment advice..........