Forex allows traders, even beginners, to speculate on fluctuations in currency prices. But in order to be able to trade on the international foreign exchange market, it is important to have a minimum of knowledge about it.
The Forex or FX, contraction of the words Foreign Exchange, is the foreign exchange market or currency market. On this market are exchanged international currencies whose exchange rates fluctuate continuously. This interbank market was created in 1971 with the change from fixed rates to floating rates.
On this financial market circulates an enormous volume of liquidity, more than 4000 billion dollars per day. This titanic liquidity gives it a prominent place among the largest financial markets in the world. There are a large number of players who operate in Forex to name only central banks, commercial banks, financial institutions, industrialists, corporations and individuals.
There are many reasons for them to transact in the forex market, including the possibility of making profits through speculation on currency prices. The general public is more and more attracted to Forex trading , hence the rapid proliferation of Forex broker sites.
The binary options have also contributed to the growing success of Forex . Easily accessible and widely affordable, option contracts on the fluctuation or variation of exchange rates are of increasing interest to individuals and novice traders.
Binary options to make money on Forex
Forex trading has a reputation for being an easy investment that does not necessarily require increased technical knowledge. The foreign exchange market is in fact easy to access and all investors, even the most amateurs, can make their assets grow there 24 hours a day, 5 days a week. The advent of binary options has made it even more accessible trading operations on the foreign exchange market.
The principle of binary options contracts on the Forex is simple: the trader must speculate on the fall or the rise of the quotation of a currency against another on a given expiry date.
If the trader made a prediction that turned out to be correct, he obtains the profit previously defined by his broker, with returns of up to 85%. The most commonly traded currency pairs are EUR / USD, GBP / USD, USD / CHF, and USD / JPY.
Beginner traders most often speculate in currencies they are familiar with so as not to suffer too much from the uncertainty and volatility of certain currencies. If the trader thinks that at expiry the pair he has chosen will increase, he chooses a call option “CALL”. If on the contrary, he thinks that the quotation of his currency pair will go down, he will choose the binary put option “PUT”.