Gains and losses on forex trading, is due to the difference between the selling price and buying price in the currency to be traded. If at the time we took the position of purchasing transactions, we will be able to benefit if we buy the currency price increases. Conversely, if the value of the currency is declining, then we will suffer losses. Likewise, if at the time of our forex trading, putting on a sell position, then we will benefit if the value of the currency falls. Conversely, if the value of the currency increases, then we will suffer losses.
Many forex traders who make transactions based solely on estimates or feeling. That means that the forex transactions are conducted with the consideration that is not cooked. This makes forex trading,considered a form of gambling games. Though higher, or decline in currency values, is an unpredictable market movements. Although, of course there are predictions that are not appropriate.
Forex trading is an investment that promises big profits. But beside that, the forex trading also has substantial risk of loss as well. Many traders with less mature consideration, just think of high returns, without really thinking about risk. However, forex trading is an investment. So that results can be obtained by investors as expected, requires mastery of analytical methods in such investment. Forex trading is no exception. Analytical methods can provide sufficient explanation useful for forex traders, about the increase or decline in currency values. So forex players, do not put a position or conduct transactions using feeling only.
In forex trading, the concept of analysis is generally divided into two major parts. Namely technical analysis and fundamental analysis. Technical analysis, are simply the analysis using data graphics. So this analysis is an analysis of reading the movement of forex trading charts. While fundamental analysis, is the analysis of what makes news in the market, as the subject of analysis. Both this analysis system that provides no guarantee of 100% must be true. Both have advantages and disadvantages of each.