What’s Forex? Full Truth About Forex!
Have you ever wondered what Forex is and why there’s so much talk about it? Today we will answer these questions and tell you the full truth about Forex. First, it is necessary to define the concept of this market. So, Forex (Forex, FX – an abbreviation of the English phrase FOReign Exchange) is the «interbank market of currency exchange at free prices (that is quotes are formed without restrictions or fixed values)» (Wikipedia).
Does the Forex broker bring money to the market? No.
However, today the Internet is replete with information claiming that Forex trading is a scam and that dealing centers are kitchens. There are enough such reviews that traders are deceived by the scam broker showing them the price chart (as for example, described in the blog voronkov-kirill.livejournal.com); as a result, speculators do not work directly with the market, and? do not even go beyond the broker terminal. To see this, traders themselves compare market quotes in Forex brokers’ terminals, but this information does not help them to achieve the truth.
This is because the trader’s money, delivered to the broker, in fact, remains with the broker. You should be aware of this. None of the brokers, whether established or just beginning, brings your money to the financial market. Trading with a broker, you play against him and your earnings – a loss to the company. That is, all Forex brokers’ kitchens work in same way.
There are constantly new negative reviews on the Internet about brokers who take the traders’ money and disappear. Some people believe that, in addition to Forex brokers, there are also dealing centers (DC) in the market that play against the trader by tricking him. And the negative reviews from traders relate to them relate to these dealing centers. Dealing centers (or even DC) are companies that provide their clients with access to Forex, acting as intermediaries in the performance of their trading operations (for example, EasyMarkets (continue to site), FxPro (continue to site), AMarkets (continue to site), InstaForex (continue to site), EXNESS (continue to site), etc.).
If you consider all the brokers to be part of DCs or kitchens, should you trade on Forex at all? Let’s try to answer this question, using the data we have obtainied from the Internet.
Are all Forex brokers fraudsters? No.
Honest brokers exist. Otherwise, there would be no concept of «Forex»; this market would be simply forbidden. It is worth remembering that serious Forex brokers obey the laws of regulators, who oblige them to follow the rules for paying income to traders, and this money falls into the wallets of traders from the pockets of the broker. Therefore, constant huge earnings will not be guaranteed to the trader; a constant high income is costly for the company.
However, it is important for leading brokers to have a strong trust relationship with usera, so that brokers have an opportunity to gain income for Traders. The network has real positive feedback about the work of reliable brokers; we’ll confirm this later in the article.
Forex does not tolerate unprofessionalism. Carefully study information about the broker if you want to achieve success in trading.
Is the broker responsible, or does the broker keep promises?
The broker’s regulation is a controversial issue; many brokers have regulation, but does it help the trader in reality? Not always, and online reviews prove it. A decent Forex broker, of course, has a set of rules and he conducts activities so that the client continues to gain.
You should understand that when you sign a contract with a broker, the text of the document may indicate that the company does not take responsibility for terminal failures, trades, losses and risks. In other words, almost nothing. At the same time, according to the contracts, you can adjudicate all disputes in the World Court.
Here you do not receive money, your broker is stubbornly silent in response to your indignant letters or begins to be rude, you write letters to all regulators – to the Western regulators (Cysec, the official website; Fsa, official website; BaFin, official website, etc.) – but in most cases nothing changes because you signed the contract and reviewed its contents without outside pressure. Such cases in courts are among the simplest: the contract has your signature, and you put it there voluntarily.
Learn about why you need a reliable Forex broker. Forex brings income but also has a large number of risks. Remember, though, that risks are inevitable.
Can i choose a reliable Forex broker? Yes.
But it’s necessary to do serious work in preparation to study the ratings, reputation, reviews, experience. And that’s where many naive budding speculators fall into the trap of scammers. While searching for the dealer, the trader selects the most profitable option; he is bribed by conditions, bonuses, minimum deposits.
You should understand that the leaders of the industry do not need such marketspeak, but a lot of small companies use it. You can be a knowledgeable trader, pay attention to the search for a proven trading terminal, find a reliable broker and then, according to the results of trade, you can be surprised when faced with the situation of «no money, no service, and no professionalism». Did Forex really exist?!
Forex does not tolerate naivety. Carefully study the offers of brokers, filter out doubtful ones, and trust your money to reliable brands.
And yet, how to find an honest Forex broker?
Yes, it is difficult to find a really serious broker that does not deceive and allows you to earn. It is possible to study the mass of thematic sites where ratings with positions are specified, and they will be different at each resource. Of course, high positions are usually occupied by the companies on everyone’s lips. Choosing a broker, you should know that no one will give you everything at once. Only small dealers or little-known brokers promise to provide everything at once and attract more people through advertising in order to take all their money.
They are engaged in deliberate denigration of the reputation of competitors by generating scandals. Therefore, starting to study reviews about the leaderboard rankings, you can see a lot of materials from obvious competitors. Often small brokers’ companies work with freelancers for their PR, to deliberately publish negative reviews.
Such companies are also not above making cold calls, purchasing a database with phone numbers, and offering trading on Forex by describing its limitless benefits. How will a large self-sufficient broker behave? He values his reputation, stability, reliability, and regular customers; he thinks of a calm, sustained marketing policy, special offers, and promises only what he is really ready to provide. In this case, let’s say that «the smaller the broker, the greater the possibility of fraud and a scam». Though there are also those companies that earn reputation gradually, honestly and without «black receptions».
Forex does not tolerate the lack of ability to think and analyze. And if you find it difficult to understand doubtful offers, reviews and the reputation of brokers, how will you analyze the market?
Who needs widespread Forex advertising?
Today, we are attacked from all sides by aggressive advertising about the possibilities of trading on Forex – it’s easy online earnings which will immediately and forever change our lives. One has only to start trading. Brokers run big campaigns and give monetary gifts to already registered traders. And really, why not take advantage of the broker’s offer? Every day someone who falls for advertising is registered with another fraudster, without looking at the reviews, the license, the content of the contract, because «campaign time presses» and, after transferring money to the broker, the most interesting part begins: under the mask of a Forex broker is another speculator.
Forex does not tolerate false expectations. Learn to distinguish scam brokers and work only with trusted companies.
Minimum investment in Forex trading: is it right?
After passing a demo trading and choosing a Forex broker, speculators usually move to the real market. Most often, you can start trading with the minimum sum (1US dollar, 10US dollars, etc.) that you have to transfer to your account to start making real money. It is not such a high amount; students, pensioners, and housewives often have such money and can easily transfer it to the account – as well as easily lose it.
The trouble here is that after losing money, the trader will not particularly worry about it and invest again this minimum sum, again lose, and will try to trade on some future occasion.
Forex does not tolerate disrespect for money. Want to start earning on the market? You should act, self-improve, test, and not just siphon off your pittance.
Is it easy to trade on Forex? No.
Aggressive advertising often tells the trader that it is easy to obtain high earnings through Forex trading. It’s difficult not to believe in this advertising. The problem here is that the market is unstable, difficult to predict and what will happen in an hour is very difficult to project; similarly, gaining through investment of your own money is difficult and risky. If you are seriously prepared and have impressive theoretical and practical knowledge and skills, you will be able to work in the market.
And what happens if a trader has no experience in the analysis of the market situation? Yes, there are indicators, strategies, trading signals. But there are reviews that says that signals in the broker’s terminal do not coincide with market quotations; it would seem that you put a position, and it either jumps or stop losses do not work and, as a result, the positions are closed by themselves and you lose your income.
Forex trading does not tolerate laziness. Forex is quite hard work. That is why there is a small number of really successful traders who give all their free time to Forex.
Is Forex simple and easy to understande? No.
Everyone loves a freebie and easy money. If the opportunity for easy money occurs, everyone just rushes to it and loses out in the end. The availability of the Internet, which nowadays is in every house, helped to spur the desire to find a way of to achieve easy income through freelancing.
Forex can surely be considered a type of freelancing, but not every active trader suspects that it requires serious training, knowledge and skills.
Forex does not tolerate freebies. Forex trading is the same as any other job. And if you are interested in this area, you have every chance to achieve high results from trading if you properly learn how to trade in/on the Forex market.
The full truth about Forex: what is it?
The full truth about Forex, in fact, is that it’s possible to obtain reasonably good income here. But it’s necessary to do a lot: learn, read books, analyze, think when reading reviews, test a demo account, start trading using stop loss, take profit and money management rules.