Forex or FX, an abbreviation for Foreign Exchange, means currency exchange, friends. You can use the definition of Forex to refer to any international market where one currency is valued against another and where a currency is traded. Open 24 hours, 5 days a week, the Forex market has no single trading center and is an over-the-counter market (OTC). Forex markets are the largest in the world and offer the opportunity to trade in both directions, with one currency gaining and losing against another. The leverage factor is the most important feature of Forex Markets, which has more liquidity than even the largest stock exchanges in the world. Leverage rates vary by country. It is determined and audited within the framework of specific legal legislation according to the capital market auditors of each country.

According to the new communiqué, with the amendment made, the maximum leverage ratio in leveraged trading transactions has been reduced from 100:1 to 10:1, and it is obligatory to deposit at least 50,000 TL or equivalent foreign currency for leveraged trading transactions. Start processes.

In Forex Markets, it is possible to make forward and spot transactions not only on currency pairs but also on precious metals and commodities such as Gold, Silver, Petroleum, Platinum, Palladium, Copper, and Natural Gas. In addition, it also offers the opportunity to make two-way transactions in international stock market indices.

How does FX trading work?

As mentioned, investing in Forex involves speculating on the price developments of currency pairs, which are instruments that monitor the relative value between two national currencies. The value of each coin is a function of demand and supply, and supply is regulated by a national central bank through the printing and circulation of money. The central bank also sets the interest rates at which commercial banks can deposit funds or make loans with/from the central bank. Both fall between the central bank's primary tools to manage national monetary policy. Thus, a central bank can indirectly affect the country's economy: by lowering interest rates, companies can access "cheap" money to expand their operations and secure more jobs. On the other hand, printing money creates inflation and devalues ​​the currency.

It stagnates the economy by reducing the convenience of retail shopping. As a result, it is helpful for a Forex trader to be familiar with current events and economic (as well as political) news. Also, markets are subject to market cycles and independent behavior cycles, which allow us to examine them based on past behavior. Since calls are made up of individuals, a person's instincts, fears, and ambition also determine market behavior. This has spawned the school of technical analysis, which ignores the abovementioned fundamentals. Either way, more is needed to open an account, deposit money, and unconsciously press buy or sell buttons to understand how forex trading works. To be successful, it is necessary to understand what drives markets and apply knowledge to behavior.

How to Start Forex Trading

Forex trading for beginners, briefly opening an account and depositing money into that account, then choosing a currency pair and deciding whether you want to buy (trade long) or sell (trade short) a CFD (contract for difference) on that currency pair matter. However, it is much more complex and enjoyable. Entering the world of Forex means entering a world where the action never ends. It means entering a world that requires you to always control many factors, including news, events, financial data disclosure, geopolitical developments, and almost anything else that could impact the market. Learning about these issues is vital to success when trading Forex, and anyone who can do this can find success as a Forex trader.

There is always at least one forex trading session open during the week. It is also possible for the market to be extremely calm and for trading volume to be low or "thin" at times.

What is a Demo Account? Why is it Important?

The Forex Demo account is developed for Forex traders to familiarize themselves with the market, products, and operations before opening a real account.

The Demo Account is critical to see your brokerage house's trading conditions and investment psychology. Demo accounts provide a safe area to test and develop different trading strategies. Thanks to the demo account, you can trade and gain experience without risking your money.

According to the CMB's communiqué published on 14.01.2016, the investor who will open a Forex account must first open a demo account from the same brokerage house and make at least 6 working days and at least 50 transactions in this demo account.

Forex Trading Conditions

Investors who want to trade in Forex can benefit from essential advantages such as double-sided investment, leveraged transactions, forex bonus campaigns, low spread rates, and high liquidity.

Two-way investment; In Forex means winning when prices fall or rise. The important thing here is to predict the direction of prices. If you correctly predict that prices will fall, you will make a profit. If you expect prices to increase and it turns out to be correct, you will still profit.

If leverage, It is a system that allows you to enter more significant transactions with the collateral amount. Some forex companies offer average leverage ratios of 1:100, while others provide as high as 1:1000. Each forex company enables the use of force as determined by its licenses.

The leverage ratio indicates how many times your collateral amount will be traded. Therefore, a prudent decision should be made.

In addition, forex transactions can be made with low spread rates. Spread is the difference between the buying and selling prices of an asset. The lower the spread, the faster the profit will be. For this reason, trade with low spread rates reduces investors' costs. Reliable forex companies such as Olive Markets and Fxpro offer very low spreads.

When choosing a forex company, it is necessary to consider whether it is reliable and offers advantageous trading conditions. Licenses owned by companies and customer comments about money transfer processes are some criteria that enable us to measure reliability. Forex companies that successfully meet these criteria are generally reliable brokerage houses.

Another advantage of Forex is that it is the most liquid market. Liquidity; refers to the ability of an asset to be converted into cash. Forex also has high liquidity with high trading volume. In this way, the orders of investors who trade in Forex are realized instantly. There will be no problem in terms of supply and demand.

In addition to all these, it also supports new investors with forex bonus campaigns. Even with the demo account type, it is possible to gain experience by performing transactions with virtual balances in actual market conditions.