Forex Fundamentals in Dubai
Table of Contents
Introduction
Shortened for foreign exchange, Forex refers to the global market traded currencies from different countries.
People speculate on currency values and make a profit on these fluctuations.
Investors do not have to involves with the physical buying or selling of currency.
They can also speculate on currency values using different derivatives such as binary options, spread betting, or contracts for difference (CFDs).
However, these investing tools are riskier due to unlimited profit/loss potential. Trading with actual currencies is considered safer since investors only risk what they originally invest.
Forex trading can be confusing and difficult for beginners to understand, so it is essential to do thorough research before getting involved with actual money.
Luckily, many brokers offer free tutorials and even practice accounts to apply strategies without using real money until you feel safe.
Even though Forex does not require physical travel like futures trading. It is still essential that traders establish an account within their country of origin because that will tax.
For example, suppose a trader has $10,000 within an account in America. In that case, they will tax on that capital gain if they sell for a profit, and it is their responsibility to report this to the IRS.
However, if that same trader has $10,000 within an account in India, they would not have to pay any taxes even though the gains came from trading with Americans.
The Forex market can be highly profitable yet very dangerous, so please do your research before deciding whether or not you should become involved with actual money.
Many brokers are offering free tutorials or practice accounts to educate traders better.
Forex Fundamentals in Dubai
First, choose a country’s currency they think will increase or decrease in value relative to another country’s currency over time.
You would go into the Forex trading platform and type “buy” “Riyal”, – meaning you would like to buy the Riyal against your dollars.
Then it states how many Riyal you can purchase for 1 dollar. It is up to you now whether you think the price will go up or down, so you can choose how much money you would like to invest in Riyal.
If the price of riyals goes up and you can sell them back for more than what you initially bought the riyals for, you will profit.
There are Two Types of Trading
Technical Analysis and Fundamental Analysis
Technical traders use charts and trends when making their decisions.
In contrast, fundamental traders focus on economic releases and company reports to predict where the market is going.
People trade with actual currencies, but they can also speculate on currency values using derivatives such as binary options, CFDs [contracts for difference], etc.
All carry a very high risk because there is unlimited profit/loss potential. When trading with actual currencies, there is less risk because you only have the capital that you invested at risk.
Many Forex brokers in Dubai offer training to better educate people about how everything works and how to manage risk when it comes to trading.
A broker is a market maker that provides price quotes used by traders buying or selling currencies.
The Forex market can be highly profitable yet very dangerous, so please do your research before deciding whether or not you should become involved with actual money.
Many brokers are offering free tutorials or practice accounts to educate traders better.
Forex trading is a market worldwide where currencies from all over the world are bought and sold.
It may beneficial to have an account within your country of origin that you will tax if selling currencies for a profit.
One way to help manage risk is by having a Stop Loss Order on any trade you make. It will automatically sell off the currencies once the price reaches the Stop Loss value that you predetermine.
You can also use Limit Orders to set the price you would like to buy/sell currency pairs when making trades.
Here is a link if you would like to read more.
