All language subtitles for 1. 3 What is Forex & Types of Forex Traders

Hello, everyone, and welcome back to the course.

In this video or in this lecture, we're going to be learning what forex trading is all about or what

Forex is about.

So you've probably have heard of the word forex or forex trading in the past and wondered what forex

is all about.

Maybe you even have friends that trade the forex market, or you've heard of someone who trades the

forex market and you've heard them see maybe they've made money trading forex or the McMahon student

forex and wondered what forex trading is all about.

In this video we're going to try our best to explain that some basic terms what forex trading is about.

So to the big question now what is forex?

What is forex?

So as you can see on my screen right now, forex.

It's cutting from towards foreign exchange for that's for to stand for foreign and then to send for

exchange.

So that's what forex that's what the term forex stands for and forex and foreign exchange or forex is

the conversion of one country's currency into another country's currency.

That's basically it's the conversion of one country's currency into another country's currency.

So if you've ever converted your country's currency into another country's currency, whether for traveling

purposes, maybe you're going on a vacation or you're traveling to visit a friend outside the country,

or maybe of for the purpose of purchasing some items from from that country or for whatever purpose

or reason, then you've participated in forex trading without even knowing it because you've exchanged

one country's currency.

Into another country's currency.

Now the forex market is by far the largest market in the world, with more than $5 trillion traded on

a single day.

And this forex market is larger than the stock market and the cryptocurrency market combined.

The market is a 24 hour market that it goes on for 24 hours in a day and for five days in a week.

So it's some of the things you need to know about the forex market.

Now the conversion rates between two currencies is never constant, and that's why it's possible that

you converted.

Let's see, you converted the US dollars to euro maybe today and you got it at the conversion rate of

$1.07 to €1.

Just an example.

And then you come back maybe after a week and then try to convert the same dollar to euro and then you

see that the conversion rate is no longer $1.07 to €1.

Let's see, it's now $1.1 to €1.

Okay.

So you've probably encountered a situation like this probably if you've exchanged the currency or your

country's currency to the country's currency or multiple times, or if you've basically participated

in forex, like I just explained earlier.

So you've probably encountered this phenomenon whereby the the.

Whereby the conversion rates of of this currency into the other currency is not constant.

So it's never constant.

And then even though the movements are minute, are very little, most of the time it's still not constant.

Now this constant changes in the exchange rates of one country's currency into another country's currency

are caused by the activities of the forex market.

Okay.

And also the principles of economics, the principles of supply and demand.

And as professional forex traders, we take advantage of these changes to make profit in the market.

So that's basically how we make money in the forex market.

We take advantages of the changes in prices of exchange rates between two currencies, between one currency

and under the currency as professional forex traders.

And of course that's the purpose of this course to introduce you to the forex market and ultimately

teach you how to make consistent profit in the forex market.

Now, some of you might be asking, but how do we actually make profit or how do we actually make money

with these changes in the forex market?

So this is actually pretty simple.

Okay, so we make money in forex trading by buying a currency when it's low and selling it when it's

high that basically it just buy a currency when it's low and sell it when it's high, you're going to

make a profit.

When you buy currency, when it's low and sell it when it's high.

The difference between the two prices you bought and sold is your profit.

It's basically like, let's say you buy your Jordans or you buy a shoe, you buy it at a wholesale price,

maybe from Silsila and then you sell it to retail consumer.

Okay, Of course, you know you are not going to sell it at the price you bought it.

You are buying it from a wholesale dealer or let's see the manufacturer.

Even so, you buy it at a very low price and then sell it at a very high price.

So the difference between the prices, that's your buying price and your selling price is the profits.

And that's basically the idea between all the idea.

Also in forex trading, that's basically how you make money in forex trading.

So let's take this for example.

We can see this is how to make money trading forex.

Okay, so let's take this for example.

Now I woke up today and then the conversion rate between dollar and euro is two.

Okay, so $1 or one US dollars, give me €2, okay?

And then I don't buy $100 worth of euros.

Okay.

And then of which I will get €200 because $1 is what, €2 today?

And then when I buy $100, I will get 100 €200 because of this present conversion rate.

Okay.

And then let's see, I wake up a week later and I want to convert my euro to dollar and to convert my

euro to dollar.

I want to have back my dollar.

I want to have my dollar back and I just want to convert my euros, which I haven't used to dollar.

And remember, I now have €200 and then I wake up today or one week later and then I discovered that

the conversion rate between dollar and euro is no longer true.

It's no longer $1 to two years, it's now $1 to €1.

So it means the euro has gained value over the dollar.

And then now remember, I now have €200.

So my €200 when converted back to dollar, would give me $200.

Q So you don't see the sentence that so because the conversion rate has now improved for you, and then

when I convert my euro back to dollar, I don't get $200 instead of $100, which I initially bought

you remember, I bought $100 initially.

Now this Now I've been able to make a profit of $100.

That's comparing it to the $100 which I used in buying my euro initially.

So because right now I have $200.

So I've been able to make this profit by simply buying and selling at the right time or at the best

prices.

So I, I, I bought euro when you was cheap when you was down, okay.

That's when $1 equals to one equals to €2.

So euro was down.

I bought $100 worth of euros to give me €200.

And when you rose up and I sold it to make a profit of $100.

So right now I now have $200.

So that's basically an example of how we make money trading forex.

Now, of course, the changes between currency rates are usually not this big, not as big as this example

we've just looked at.

And these changes are usually very little, very minute.

And for this reason we use what we call leverage in forex trading.

So we use leverage to be able to make substantial amount of money in forex.

In fact, some people call the forex market the leverage to market.

So this is what enables us to make more money or plenty of money from little price changes.

And just to leverage us, you've been allowed to buy more than you can actually buy with your money

or you've been allowed to trade more than your money can actually treat the forex market.

So leverage is what helps us make money in forex trading, and this leverage is given to you by your

broker.

Different brokers have different amounts of leverage they give to their traders.

And of course we're not looking at brokers in this video neither.

We cannot leverage.

Okay, I'm just introducing you to the concept of leverage and also brokers.

So we're going to be looking at these concepts more in depth, in further lessons.

But I just want you to understand or to have an idea of what the leverage is.

Okay.

And so Forex trading has been around for a very long time.

In fact, often exchanging is centuries old.

It dates back to as back as the Babylonian period, I guess.

And that's how far First reading this book, however, modern forex reading began in the early seventies,

and the forex market is a decentralized market.

It's not controlled by a particular body, it's not controlled by a particular government.

It's a decentralized market.

So anybody can come in and participate and make money.

So modern forex trading began in the 1970s, like I said earlier on, and actually we've seen forex

trading evolve.

Forex trading has evolved over time the way people treated forex in 1970s, in the 1970s is not the

way people treat Forex today and the 21st century technological advancements and the coming of internet

of meetings.

Really easy.

Okay, so from the comfort of their homes, from the comfort of their offices, people can partake in

the forex market via the internet, of course, with a computer or phone and with internet access.

And that's how technology has actually made things easy and also made trading forex easy.

Okay, now we're going to be looking at the types of forex traders.

So there are basically four types of forex traders.

We have the scalpers, we have the day traders, we have the swing traders and we have the position

traders.

So I'm just going to go and try to explain each of these types of forex traders for you to understand.

They are their characteristics and features.

So for the scalpers, the scalpers are kind of short term traders.

The focus on interesting positions in short time frames and holding them for very short periods like

seconds, 2 minutes.

Okay, That's basically what the scalpers do to hold positions for very short times, short time durations,

4 seconds, 2 minutes.

So this is in order for them to take advantage of very small market movements.

So they enter multiple trades and try to take advantage of very small market movements in order to make

profit.

So we also have the traders and the detritus intermediaries also, but they can hold seats for longer

periods of time within a day and they tend to target even more profits than the scalpers.

And and they also tend to close all the treats or all their treats before the end of the day.

So these are the characteristics.

Of the district and then the spring.

She does hold onto treats for longer than one day and perhaps for up to a couple of days or weeks.

So dental less treats but make more profits partly because they see longer in a single treat, unlike

the scalpers which enter multiple trades.

But it's a very.

Was bought for a very short time.

And then the swing traders tend to ignore little market fluctuations and the much bigger profits.

And then we have the position treaters and then these ones they hold on to treat for longer periods

than all other types of traders They hold on to treat for several weeks to even years, and they are

less interested in short term price fluctuations, are more concerned with long term gains.

So that's it.

About the four types of forex traders, the scalpers, the traders, the string traders and push on

traders.

And with this, we've come to the end of our lecture for today, or we've come to the end of this lecture

and we're learning about currency peers in our next lecture and hope to see you there by.