Although many say that forex trading requires analytical skills and a lot of guts, it does not mean that forex trading is difficult to learn. As long as you take the time to learn what forex is, what forex trading is, and how it works, you as a prospective trader can definitely earn extra from here.

What is forex? And how does it work?

Forex is an abbreviation of foreign exchange which when translated into Indonesian becomes foreign exchange. Simply put, forex is a comparison of the value of a currency against another currency which then forms a currency or exchange rate. The most familiar example is the exchange rate of the United States dollar (USD) with the Indonesian currency, the rupiah (IDR). The comparison of the value between USD and IDR is known as the dollar exchange rate against the rupiah which is written with the symbol USD/IDR.

However, there are also those who understand what forex is as the exchange of one currency to another. In terms, forex means currency trading that takes place outside the exchange or over the counter. Why is forex trading called over the counter? Unlike stocks whose transactions occur centrally on the stock exchange between three parties, namely you, the broker, and the stock exchange. In forex trading, transactions only occur between two parties, namely you and the forex broker.

In the stock market, the stock price of a security asset in all stock brokers will have the same price because it comes from one source, namely the Indonesia Stock Exchange. That means, stock transactions in Indonesia only occur on one exchange. Unlike forex, transactions do not occur on one exchange, but occur between you and the broker, therefore, the foreign exchange rate can differ from one broker to another. This is the difference between forex and stocks.

The absence of an exchange in forex makes the role of the broker very central, therefore you must be careful and thorough in choosing a forex broker so as not to become a victim of fraud. This is important for those of you who are new to learning forex. So, how does forex work? Because many do not know how forex works, many assume that forex is gambling. In terms of profit or not, it still depends on luck and is no different from when betting at a gambling table.

In reality, forex is not gambling, not even just for profit. Forex trading is regulated and even strictly supervised by a specially formed government agency. In Indonesia, the agency is the Commodity Futures Trading Supervisory Agency or better known as Bappebti. Every price change that occurs in the forex market can be ascertained to occur not because it is controlled by or by certain parties.

The price changes are purely based on the actual price that is influenced by the current economic conditions, along with other factors that also play a role in influencing the exchange rate of the currency. In forex, people who make forex buying and selling transactions in the foreign exchange market, manage, and run each transaction independently through forex broker intermediary services are called traders.

What is a forex broker? A forex broker is a party that is trusted to be a liaison or intermediary between traders and the forex market so that they can conduct forex transactions. Forex brokers have an important role not only as a means of transaction, but also as a place for trading education for beginner traders and provide analysis of current market conditions. How, is it not difficult to understand what forex is?

What is forex trading and how can traders make money?

Forex trading is the activity of buying and selling certain currencies in the forex market (through a forex broker) with the aim of making a profit. For those of you who are new to forex, don't imagine that forex trading means that you will often come to a money exchange place such as a bank or money changer. Forex trading is different from manual transactions, the purpose of someone buying or selling currency at a money changer is to exchange currency for transactions in different countries, so that there is a physical exchange of money.

While in forex trading, you can make transactions anytime and anywhere for 24 hours from Monday morning to Saturday morning. The purpose of someone doing forex trading is to gain profit and become one of the choices for investment. Simply put, forex trading profit is obtained from the difference between the buying price and the selling price by making a buying transaction when the price is low and a selling transaction when the price is high.

For example, you buy $100 of US dollars when the rupiah exchange rate against the US dollar is at Rp14,000. The rupiah you have to spend to get the $100 becomes Rp1,400,000. A week later, the US dollar strengthens until its exchange rate becomes Rp14,500. If you sell the $100, you will make a profit of Rp50,000 because other people who want to buy $100 now have to spend Rp1,450,000.

Forex trading is done based on currency pairs, some popular currency pairs include EUR/USD (Euro-US Dollar), GBP/USD (Pound Sterling-US Dollar), AUD/USD (Australian Dollar-US Dollar), USD/JPY (US Dollar-Yen), USD/CHF (US Dollar-Swiss Franc), USD/CAD (US Dollar-Canadian Dollar), and NZD/USD (New Zealand Dollar-US Dollar).

Just like the example above, when you predict the US dollar will strengthen against the Euro, then you will sell the EUR/USD pair. While if you predict the Euro will strengthen against the US dollar, then you will buy the EUR/USD pair. If your prediction is correct, the difference between the selling price and the buying price of EUR/USD will be your profit.

But you should know, predictions in the forex trading world are not done by guessing, but using analysis, either technical analysis with indicators or fundamental analysis that relies on economic and political news that can affect currencies. Then, where can you do forex trading transactions? You can do forex transactions independently through a forex trading platform that can be downloaded on a computer or smartphone.

But before that, you must first create a live trading account at the forex broker you have chosen. So, the initial capital for forex trading besides funds for deposits is a computer or laptop device, smartphone, internet connection, and the ability to analyze the market.

Then, how do you play forex?

After knowing what forex is, how forex works, and understanding how forex trading can generate profits, the next step is for prospective traders to understand how to play forex for beginners. Here are the instructions.

1. Choose a forex broker to create a live trading account

For beginner forex traders, choosing a forex broker can be confusing for you. In order not to get caught with a fake forex broker, make sure to choose a forex broker that has a permit from an official regulator such as Bappebti. If the forex broker is international, at least it has a regulatory permit from the country of origin. Also find out the reputation of the brokerage company you will choose, whether the broker has ever had any problems, especially legal problems.

Then, have the authorities ever frozen a broker's license? The easiest way to find out is by browsing the internet or asking experienced traders directly. Also, make sure the broker has plus points such as easy and fast administrative processes such as registration, deposits, and withdrawals and provides educational services on the right trading or investment methods and strategies.

The best forex brokers will also offer demo accounts and hold trading learning classes for beginners. Also find out the costs charged to traders or investors, such as commission fees, spreads, and swabs. These costs can reduce trader profits! Find a trading platform that benefits you, if you have found it, follow the registration process to create a live trading account, then enter a deposit for trading.

2. Choose the right forex pair

In forex trading there are terms major currency pairs and cross currency pairs. Major currency pairs are currencies of a country that are paired with the US dollar, while cross currency pairs are currencies of a country that are not traded. Traders must pay attention to currency exchange rates and ongoing global economic developments in the forex market, as well as find out today's forex predictions through today's forex news.

Also, do not miss the policies that will be taken by central banks, both regarding economic prospects and interest rate policies that will be taken, either raising or lowering interest rates that will affect price movements in the market. Choose the right time to buy or sell. The moment when data is released that has a big impact on the market (high impact) will be eagerly awaited by traders to make transactions. Quick analysis and quick action in trading will affect the final results that will be obtained.

3. Pay attention to price movements

Price movements in the forex market usually occur due to the development of the macro and micro economy of each country which can affect the value of a country's foreign exchange. However, don't worry, if you choose the right forex broker there will be today's forex analysis that can help you find out. The strengthening and weakening of the economy of many countries, especially those whose currencies are traded, will create price volatility.

By paying attention to price movements, you can choose the right time to determine a trading position. Choosing a trading platform that provides the lowest spread and does not charge commission fees is highly recommended for effective trading when opening and closing positions. Simply put, if you initially made a "buy" then you must close it with a "sell", but if you initially made a "sell" then you need to close it by making a "buy".

An easy way to trade forex for beginners

Don't worry if you are a beginner, GIC has an ecosystem that will help you start from the trading platform, trading education, copy trading features, and other features that make it easier for you to invest. Not familiar with GIC? Let's get acquainted. Unlike other conventional brokerage companies, GIC through the GICTrade platform provides a solution for traders who do not want to be burdened with high trading costs.

GICTrade is a peer-to-peer trading platform that brings together traders and market makers. So, what's so special about GICTrade? As a platform that brings together trader and market maker, you as a prospective customer can certainly choose between the two, namely becoming a trader or a market maker. GICTrade's role as a transaction venue provider can minimize costs and help maximize profits for traders and market makers as well as create a fair transaction atmosphere and results. T

traders will benefit from no commission fees and swap fees and low spreads due to the presence of market makers as liquidity providers. You can also join the trader community on Telegram GICtrade to ask fellow traders directly about their trading experiences. Also follow Instagram GIC to get webinar information and various attractive prizes.

In addition, on GIC YouTube, traders can also learn trading for free! What are you waiting for? More complete features that fully support you to start investing and trading forex through GIC. Make transactions simpler, safer, and more profitable. Start by creating a demo account. Now do you understand what forex is?