Good afternoon, I've been absent the past couple of days because I was preparing for a heavy series about forex.
I will explain in this series about forex in simple language and honest information,
I said (honest) because MOST of the sources present to you (Manipulated information) for the purpose of attracting you to register under his referral or to convince you to subscribe to his paid tutorial or so ...
Bottom line, I don't mean to suspect anyone's intentions but what I saw in the past 6 years is people only show the positive side, and Ignore the negative side intentionally.
What is Forex?
Simply, it is a way to lose or make money online, and this happens in trading fiat currencies and commodities and materials and indices.
almost everyone intentionally hides the fact that YOU MAY LOSE YOUR money and I saw NO ONE covered the loss details right enough.
the loss part happens for the same reason as the liquidation in crypto, and for those who have no idea about this, I will try to explain it to you.
How Does Loss Happens?
You made a deposit of 5000$ USD in Kucoin as an example, and you saw that BTC will go to 120K USD within the next period of time.
You want to buy one piece of BTC, but you are short of about 42,500 USD, so what do you do? You apply for a loan inside the trading platform, which in this case it is Kucoin, and you will get it immediately.
Obviously, you will NOT be able to make any withdrawals until you repay everything,
so, you have now the 47.500K, and you bought one piece of BTC at 47.500USD.
What do you think will happen if the BTC price drops to 42.500USD? will the platform share the risk with you? why would they do that?
No, they will NOT, so the position will be closed automatically to protect the borrowed money, and a sell transaction to the BTC will occur.
That's basically what happens in the margin trading of the forex industry, with a few differences in the Backend details.
Ofcourse, if a profit happens no one will be sharing the profit with you in either industry.
How Does Forex works?
A trader (You and I), enter the industry by a broker, the broker is our gate in, the broker is a middleman between us and the liquidity providers, and liquidity providers often are big banks and hedge funds wallets.
So, those are the 3 parts forming forex industry, in order for any one of those 3 to make money, another one will HAVE TO LOSE money, The broker is a winner in all cases because they take fees and commissions, so the battle is between the trader and the whale, if the whale wants to make money, novice traders will lose theirs to the whale!
Narration
In order to make money, all you need to do is anticipate the next move of the price, please check the image.
This image represents the Great British Pound against United States Dollar pair, the green and red sticks you see are called (Japanese candlesticks), and they represent the price movement, we have X-axis and Y-axis, where X is the Time and Y is the price, now you should be understood that the candlesticks are a projection of the price movement,
the green candles mean the price went up while the red means the price went down (dropped),
Don't worry about the anticipation of the movement now, all you have to know is your Loss of profit determined by your accuracy in reading the chart.
If you saw that the price is going up, you open a Buy position, and if you saw it will go down, open a sell position.
Homework
Goole (Best forex broker), spend some time reading the reviews about the brokers, choose the one that suits you and your local laws, and open a demo account, and the demo account is a trading account with virtual funds designed for educational and training purposes, and I prefer with the following details:-
Account type: Standard
Initiating capital 500 USD
Laverge :- 1:400
Platform MT4
I will elaborate further on this in later posts.
at the end of this post, I intentionally focused on the loss part of the forex because most of the people marginally mention the loss possibility while here I screamed loud and clear that the LOSS IS SO POSSIBLE AND OFTEN PROBABLE!
You should expect the loss, and make it part of your plan if you decided to enter this industry.
See you all.