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Forex Trading: Understanding, Advantages, and Disadvantages

 Forex Trading: Understanding, Advantages, and Disadvantages! - Forex trading today can indeed be regarded as a fairly promising income field.

How not, forex trading does not require considerable capital.

In addition, it is not too complicated in its use.

For information, often found forex trading players are those who have been in the world of stock trading for a long time.

Then, what exactly is the meaning of forex trading? And how does forex trading work itself?

Nowadays, maybe many people will say they can get rich quick if they play forex trading.

However, it is not necessarily accompanied by an in-depth understanding related to the understanding of forex trading itself, both in terms of characteristics, advantages, and risks.

In the following explanation, it will be discussed the basic understanding of forex trading that everyone must know.

So, what is forex trading?

Forex trading or also called forex trading is currency trading from different countries with the aim of making a profit.

In this case, forex itself is short for Foreign Exchange or can be called foreign exchange.

An example of forex trading includes buying Euros (europe's main currency), while simultaneously selling USD (American currency), can be abbreviated EUR or USD.

In the shadow of ordinary people, the understanding of forex trading is more on the activity of exchanging money in Money Changer, which is the sale and purchase of foreign currency manually done through money changer.

In fact, actually forex trading is different from manual transactions such as in Money Changer.

Another term you need to know is trader.

What do you mean by trader?

Trader or forex trader is a term for people who do forex trading who trade currencies from different countries.

Please note, a person's purpose to buy and sell money on Money Changer is because of the need to exchange currencies to transact in different countries, so there is a physical exchange of money.

As for forex trading is done online with the aim of getting profits only.

It should also be understood, forex trading is a business activity, investment, and can even be considered a profession.


On an international scale, foreign exchange or forex trading is often carried out by various parties, ranging from governments, central banks, multinational companies, to certain individuals who have large amounts of assets or big players.

Currency transactions that occur between various parties do not occur in a market with physical buildings, but in an invisible network called the "forex market".

Along with the development of technology, forex trading can already reach a wider scope.

Through the internet, forex trading can now be done by anyone, anytime, and anywhere.

Nowadays, everyone can trade forex.

You can also trade forex online easily and with capital as small as 10 dollars.

How Forex Trading Works
Forex trading is in principle the simultaneous purchase of a currency and the sale of another currency.
The currency pairs are then traded simultaneously. For example, EUR/USD = 1.23700.

The currency on the left side (in this case the Euro) is the base currency, and the currency on the other side is called the quote currency.
The above notation shows that 1 unit of base currency is worth 1.23700 quote currencies (1 euro = 1.23700 USD).

That way, you have to pay 1.23700 USD if you want to buy 1 Euro.
Conversely, if you want to sell 1 euro owned, then you will get 1.23700 USD.

Forex trading is a foreign currency transaction that is increasingly being chosen as one way to make investments.
This forex trading involves a particular currency pair as chosen and can be traded according to certain conditions to achieve maximum results.

Advantages of Forex Trading

Keep in mind that every business or investment certainly has its own advantages and risks, depending on what type of investment will be done.

Forex trading is a pretty crowded investment in recent years.

Because this investment can make investors rich or even bankrupt.

And of course, it should be known that forex trading is an investment that is high retrun high risk.

The following will explain the advantages of forex trading investment.