Why Forex? - Easy to understand.

Forex is simply trading of currencies.
Escape from the confusing forex theories, concepts, words we are telling you the What is forex by a story in a easy & simple way. The story will show you that the fundamentals of the industry are actually not so complicated to grasp.

Why RIDITA BECOME A FOREX TRADER ?
 

Disclaimer: Please note that the story and characters are fictional and none of the events of the story should be taken or misunderstood as investment advice

Ridita is a chemistry teacher from Washington City who has spent the past month teaching in Europe through a teacher exchange programe.She has 1000 Euros in savings and she wants to open a bank account in US dollars. Her €1000 are equivalent to $1350 at the time that she opens her Bank account.

 

One day, Ridita is reading up on financial news on the newspaper at night and she sees that the euro has risen in value against the dollar. This means that his savings have increased and Ridita think to take the chance to withdraw them.                                                                     It's midnight however and the banks are shut, so Ridita decides to stop by the bank the following day after School to withdraw his money. Come daytime, the euro plummets in value and it is now pointless for Ridita to withdraw his money. She has missed a chance to take advantage of this trading opportunity.                                                                                                                           That evening, Ridita goes out for a meal with some of his colleagues and the topic of conversation is forex. One of the other teachers, Isabelle, is telling everyone about her experience in forex trading. Ridita finds what she has to say very interesting and the notion of trading online sounds very appealing to her, so he decides to look into it some more.

Ridita looks online and finds a forex broker. After examining what this broker has to offer, she decides to open an account with them. Through this account he discovers incredible possibilities. 
                                                                                        Through the use of LEVERAGE, Ridita can deposit his 1000 dollars and be given the potential to trade with up to 500,000 dollars. Leverage is used to increase the buying power and the potential risk of losses of a trader, even if they can only provide a small deposit. The next time the value of the dollar rises, all Ridita has to do is log in to his trading account and sell his dollars. She is extremely pleased with the profit she has made and is grateful that the market moved in the direction he wanted it to, otherwise she could have suffered losses that could have resulted to the loss of his invested capital.

Ridita learns the ropes of forex trading; she understands the risks involved in forex trading and begins to use TECHNICAL ANALYSIS and FUNDAMENTAL ANALYSIS to follow the market and predict which direction it is moving in. Technical analysis includes studying charts to follow market trends, whereas fundamental analysis involves keeping up to date with economic and political indicators which may affect price movement. All of this information is available on his broker's website.   

Depending on the state of the market, sometimes Ridita has a BEARISH OUTLOOK and other times she has a BULLISH OUTLOOK. When she is feeling bearish, she predicts that the value of an asset will fall and he takes a SHORT POSITION, which means she sells this asset. When she is feeling bullish, she takes a LONG POSITION, which means that she predicts that the value of an asset will rise and so she buys it. Ridita is lucky that her broker offers low SPREADS.

A spread is the difference between the BID PRICE (the maximum price that a buyer is prepared to pay for an asset) and the ASK PRICE (the price that a seller is prepared to accept for an asset). The lower the spreads, the less money a broker is charging for their services.



Ridita continues to trade forex online for many years to come. she experiences both profits and losses over the years; sometimes he makes mistakes and miscalculations, other times he hits the nail on the head and gains high profits to show for it.