What is Forex?
If you have ever been interested in trading, you would have probably come across the term ‘Forex’.
Take a look at what this term means and how people build their wealth by trading this market.
Forex is the Foreign Exchange market
Think of a market… but instead of trading goods for money, money itself is bought and sold.
Forex is a global marketplace where you can buy and sell currency, with the goal of making a profit. Just like anything else, prices within Forex rise and fall based on supply and demand.
According to Forbes.com, “Forex is the largest market in the world, and the trades that happen in it affect everything from the price of clothing imported from China to the amount you pay for a margarita while vacationing in Mexico.”
When you trade on the Forex platform, you join the world’s largest network of buyers and sellers who trade currency at fixed prices. Everything takes place online during the working week (you can trade 24/7 from Monday to Friday).
A real life trade example from a student of ours:
Richard runs a large construction company in the U.K. He wakes up in the morning before work and opens his laptop to look at the market. Based on the skills he has gained from Onyx, he decides to purchase the USD (US Dollar) against the JPY (Japanese Yen) as his analysis has led him to believe that the US Dollar will rise in value against the Japanese Yen.
He sets his stop loss and his take profit price, this means that he is both protected if the USD weakens and he is also ready to automatically take profits off the table when it rises.
Richard enters the USD/JPY trade for a buy at the price of 103.600.
He sets his stop loss at 103.400 (this means if the USD/JPY price drops to 103.400 he will be automatically protected and will not lose any further income.
He sets his take profit at 104.600 (this means if the USD/JPY price rises to 104.600 he will pocket his profit instantly and it will be secured inside his trading account.
Richard returns home after 9 hours at work and checks the market to see that his take profit price was reached.
From his entry price of 103.600 to his take profit price of 104.600 there is a 1000 point difference (100 pips)
Richard had $10 on each pip, this trade alone made him $1,000 in profit which is automatically secured in his trading account.
Here is how the trade played out: