Making Dollars Online From Forex Trading in Urdu

Let Me Tell You About Forex Trading

Forex Trading is trading currencies from different countries against each other. Forex is acronym of Foreign Exchange.
For example, in Europe the currency in circulation is called the Euro (EUR) and in the United States the currency in circulation is called the US Dollar (USD). An example of a forex trade is to buy the Euro while simultaneously selling US Dollar. This is called going long on the EUR/USD.
orex trading is typically done through a broker or market maker. As a forex trader you can choose a currency pair that you expect to change in value and place a trade accordingly. For example, if you had purchased 1,000 Euros in January of 2005, it would have cost you around $1,200 USD. Throughout 2005 the Euro€™s value vs. the U.S. Dollar€™s value increased. At the end of the year 1,000 Euros was worth $1,300 U.S. Dollars. If you had chosen to end your trade at that point, you would have a $100 gain. Forex trades can be placed through a broker or market maker. Orders can be placed with just a few clicks and the broker then passes the order along to a partner in the Interbank Market to fill your position. When you close your trade, the broker closes the position on the Interbank Market and credits your account with the loss or gain.

How FOREX works?

As we know Forex is foreign exchange. Not unlike this, it is all about exchanging foreign currencies with one another. Let’s simplify it with an example.

                You must be well aware of MONEY BXCHANGE. This is a micro level example of Forex. It is part and parcel of today’s social market. There are many people going to foreign countries and earn foreign currencies. They send their earnings to home country in the form of foreign currency and in this way their relatives are to face trouble. As they need their home currency to shop in the market. This problem is well solved by money exchange. There, you can sell the foreign currency and get the home currency. The money exchanger also gets profit from you for doing two simple things;

1.       Buys foreign currency from you

2.       Sells local currency to you

In a very likely manner, if a tourist comes to our country he will be having the currency of his own country but he needs our currency say PKR to shop at Pakistan and pay for services he gets. For this he sells his currency to the money exchanger and buys our currency then. This increases the worth of our currency. Here you get a very important point I.e. buying a currency will increase its worth.

                                Forex is just like this a very huge international business of foreign exchange. It is much enormous as compared to local markets. In local business there is more investment and less profit while in Forex there is less investment and much more profit. Actually in local business rates vary on daily basis but in Forex rates vary on per second basis due to it being an international business involving hundred thousands of people and millions of transactions processed.

                A big point in Forex is that here you can also trade in Gold, Silver and crude oil.

Now we come up with introduction to the components of forex .

Trader

A person selling and buying currencies at the same time is called trader.
Broker . when we can work on Forex , we called Forex trader
Broker is the one who processes the commands of a trader. He buys when trader says and sells when trader wants.
A good broker must have certain features. You must checkout for these features before opening any account with a broker.

1. Registered Broker

A broker must be registered to some of the regulatory system. As for example in US we have National Future Association NFA, Commodity Future Trading commission CFTC. And in Britain we are having Financial Service Authority FSA. If a broker is not registered to any of these, think twice before making account with them. click here to Register your Forex Broker

2. Customer services

Besides being a registered broker, a broker must have good quality customer services for a better contact with its clients and a handsome attitude as well.
He must allow you to contact via
· Telephone
· Email
· Online Chat

3. Commission and Fee

A good broker must not charge his clients with any registration or transactions fee nor any kind of commissions. There must not also be any hidden or secret charges as per transaction.

4. Slippage

Slippage is actually the difference in the rate at which an order was placed and at which it was conducted.
For example, if you order to buy a pair of EUR/USD at 1.444 but after some time you come to know that the deal was conducted at 1.4450 or worse it was not successful even. This will ultimately come up with loss. A good broker has minimum rather negligible slippage and let you escape any risk of loss.

5. Spread

Spread is the difference of sale price and purchase price. It varies from 0-6. A good broker has always a reasonable spread and is not charging any hidden spread during the transactions.
I must say spread is one of the most important things as we have to sell whatever we buy and lesser the spread is the more we can earn.

6. Market prediction

A broker must keep its clients aware of the trends in market what are upcoming variations and what is market up to. He must let his client know all the things about market, current affairs, international issues etc. He must update the client on day to day basis.

7. Forex Hedge

It is tool which a trader can use and minimize the odds of loss. Its details are not so important here as there are number of brokers who don’t allow hedge. However it is one of the good features of a broker that it allows its clients to use Forex hedge.