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What is Forex
Forex is an abbreviation of the English words Foreign Exchange. It can be defined as the process of exchanging currencies at a mutually determined price. These markets are open 24 hours a day, 5 days a week. It is the world’s largest and fastest growing financial market with a daily trading volume of more than 5 trillion dollars.
FOREX is an international investment market. It is one of the largest and most liquid markets in the world. Forex markets are generally used as an exchange system between currencies. However, over time, it has become a market that offers a wide range of investment opportunities where precious metals such as gold, silver, oil and various foreign stock indices are traded. These markets are traded by individual investors as well as institutional investors, central banks, commercial banks and hedge fund managers.
Forex Education
FOREX is an international investment market. It is one of the largest and most liquid markets in the world. Forex markets are generally used as an exchange system between currencies. However, in response to demand, over time, it has become a market that offers a wide range of investment opportunities where precious metals such as gold, silver, oil and various foreign stock indices are traded. These markets are traded by individual investors as well as institutional investors, central banks, commercial banks and hedge fund managers.
Forex Margin Levels
There are 2 types of margin ratios on open positions in the Forex market. These ratios, denoted by % on online platforms, are the Maintenance and Stop out levels. It is a rate set by the institution and it calls you to top up your balance to your initial margin, this call can be via email or phone. In order to stay in the market, we advise you to fund your account immediately upon receiving this notice.
If you have not funded your account despite the margin call, the system will automatically close your positions if your balance reaches the Stop out level set by the Institution. Stop out level is a rate less than the margin call level and greater than zero. Please check your Stop out level with your Institution. Please also make sure whether the Institutions require a different application for your stop out level against the risk of Gap (price jumps) that may occur on the weekend (closed market).
Forex Margin Calculation
Margin is the minimum amount of money that must be held in the account in order to enter a position in the Forex market. Margin ratio varies according to the leverage ratio. In Turkey, the maximum leverage ratio specified in the communiqué issued by the CMB is 1:10.
Forex Analysis
It would not be wrong to say that there are 2 types of analysis methods for all financial markets, including Forex markets. One of them is Fundamental Analysis and the other is Technical Analysis.
Fundamental Analysis, while trying to predict price movements, examines macroeconomic data, political relations between countries, monetary policies of Central Banks and creates forward-looking forecasts. Since Forex markets show the value of currencies of different countries against each other, the main basis of these pricing, which we call parity, is the interest rate, which we can define as the value of money. A currency with a higher interest rate is thought to be theoretically more valuable as it will be more in demand than one with a lower interest rate.
Technical Analysis, on the other hand, is to make forward-looking forecasts based on past data on charts. The movements of price movements in the past are expected to be a reference to the future. The data on the charts, which can show many time periods such as minute, hourly, daily, weekly, etc. in the form of candles, bars or lines, can be analyzed using various indicators.