What is FOREX?
FOREX or FX stands for Foreign Exchange, which is the market
where the currencies of the world are being traded. Its daily value traded goes
beyond USD5 Trillion. It is a favourite market for speculator gaining from such
sheer size of volume.
Thus, there have been many tools and methods used to make
profits by both traders and investors.
Online forex trading start to appear everywhere online and
gives opportunity to explore and exploit the potentials of gaining money.
Remember that online trading platforms are just one of the
tools. There are many other ways for people to make money directly and
indirectly through foreign exchange. For now, I’ll be focusing on ‘online forex
trading’ as there is a huge hidden secrets not known by the general public.
THE SECRET
How does the online trading brokerage works? Have any of you
gave a thought about it?
Unlike regulated markets, such as stocks, futures and
options, these ‘Online Forex Trading’ is not a regulated market. What does that
mean?
- It means, the prices shown to you can be manipulated.
- It means, different online forex trading platform could be
showing a different buy/sell price compared to others.
- It also means, within a single online forex trading
platform, could be showing different prices to different traders.
Does that shock you? Now a bigger revelation.
Unlike other markets such as again stock market, futures
market and option market, you are not selling to another buyer or buying from
another seller.
What? Then, with whom I’m buying and selling?
It’s the Online Forex Brokerage themselves you are trading
with.
Still confused? Let me explain.
You may have seen that some platform works better that then
the others, even by using the same indicators and techniques. Why is that so?
It’s because it’s an unregulated market and the prices can be manipulated.
In a regulated market, when a seller sells, he’ll be selling
to another buyer through a stock exchange. The buyer and the seller won’t know
each other except the stock exchange. The transaction is made and recorded.
 |
| Stock Exchange Trade Flow |
In an unregulated market, especially these Online Forex
Trading brokers may not even have the actual cash converted. You would be just
trading with the broker instead of buying from another seller or selling to
another buyer.
The online broker could be just providing you with a virtual
cash that doesn’t exist and you are trading with them. Even, if they do, your
trade are not affecting the actual market. Whatever displayed to you is being
manipulated to ensure in the end the online forex broker wins.
 |
| Foreign Exchange Market Trade Flow |
"They are just another CASINO."
This is the main reason why I don’t recommend trading forex
to anyone.
Reliable Online Forex Trading Brokers are far apart. Make sure you do proper research before you use any platform. I know some
friend who are doing well with their Forex trading, but you need to understand
the risk and learn from the real expert.
Another way to trade foreign currency is by trading FOREX Futures, which is regulated. No data manipulation can be done.
