To be able to play on the Forex exchange, you need to have a capital of 100 thousand dollars. But this does not mean at all that this amount should be yours personally. The money can be borrowed, while the interest for using the loan does not need to be paid to the bank. This mechanism is called leverage or leverage.
Instructions
Step 1
The easiest way to look at the principle of leverage is with an example. Let's say you have $ 100 on your account and you took out a loan with a leverage of 1: 100. To your hundred, the financial organization kindly adds 9,900 American money. So, you have 10 thousand dollars (virtual, of course), received without certificates, guarantors, almost at one moment.
Step 2
Let's start with a pleasant one - income. Let's say you decide to go bull and guess. Buy yen at a rate of 120 to 1 dollar. That is, for 10 thousand dollars, you can buy 1 million 200 thousand yen (120 * 10,000). Everything went well, your forecast came true and the yen rose, its rate became 119 to 1 dollar. Someone might say that the Japanese currency, on the contrary, fell. But if you figure it out, you will understand that in this case you have to pay less yen for one dollar, which means that it has really grown. Sell 1 million 200 thousand yen and get 1,200,000: 119 = 10,084.83 dollars. Don't forget that the bank gave you $ 9,900. Subtract them, your initial hundred, and you get a net income of $ 84 and three cents.
Step 3
Now suppose that fortune was not on your side, and the yen rate did not rise, but "sank"? from 120 to 121, 21 versus $ 1. Having done the same operations and having received 1 million 200 thousand yen, let's try to calculate your profit from the sale of 1 million 200 thousand yen at the rate of 121, 21 - the amount is 9,900, 17 dollars. As you understand, here we are not talking about profits, but about losses. The bank withdraws its 9900 and you only have 17 cents left. It should be noted that the bank always monitors borrowed funds. As soon as it becomes clear that you have already lost your money, you immediately receive a "margin call", i.e. please top up your account.
Step 4
To play successfully on the Forex exchange, you need to master two main types of analysis - fundamental and technical. In the first case, we are talking about studying the economic indicators of the country whose currency you are interested in. This refers to the balance of trade and payments, stock indices, price levels, employment, production, demand for cars, real estate, central bank discount rates, liquidity and much more. All this can tell the investor whether a certain currency will rise (or fall). The second method involves examining past market fluctuations. There is an opinion that the market moves according to certain laws, and if such regularities are identified, then its behavior can be predicted. Both types of analysis will require prior preparation. If you want not only to play on the Forex exchange, but also to win, you cannot do without an economic education.
