Trading Basics: Compared to other financial markets, the Forex trading market does not have a central exchange or physical location. The trading market operates 24 hours a day through a global network of banks, companies and individual traders. This means that currency exchange rates fluctuate in value against each other around the clock, providing multiple trading opportunities that you can take advantage of.
Start trading Forex as follows:
Choose the currency pairs you want to start trading on: Choosing the currency pairs to trade is the first decision you will have to make as a Forex trader. Major, minor and non-traded currency pairs that you can choose from. New traders tend to start with currencies they are familiar with before moving on to look for opportunities in currencies they are less exposed to.
Determine the type of Forex trading you would like to implement. There are many ways to trade with us. These methods include both CFDs and spread betting.
Trading CFDs: You can trade a certain number of CFDs in units of the base currency. If you choose to trade EUR/USD, for example, your investment will be in Euros. On the other hand, if you are trading USD/JPY.
Spread Betting: You trade currency pairs for each pip movement, usually the fourth decimal point.
Determine your decision whether to buy or sell: After choosing the market in which you will trade, you must also determine the current trading price and the direction in which you believe the market will move. Forex pairs are traded as one currency (the base currency) against another currency (the quote currency).
A comprehensive guide for beginners and opening trades
Add trading orders: Trading orders are instructions to trade automatically at a later time when exchange rates meet a certain pre-determined level. Stop loss and set limit orders are used to ensure that profits are locked in and losses are kept to a minimum.
Track your trading transactions: In active mode, your profits and losses are subject to fluctuations with every price movement in the market. For this reason, it is important that you track your buy and sell orders in real time. This way, you can easily add or close trading positions when necessary.
Closing a trade: Closing a trade is similar to opening a trade. If you initially bought 5 units, you need to sell the same number of units at closing. When you close the trade, your profits and losses will be reflected directly in your trading account.
Examples of Forex trading: Every month, the economic calendar is full of many events. One of the most anticipated news is the release of non-farm payrolls numbers in the United States. This report is issued by the US Bureau of Labor Statistics on a monthly basis, giving traders valuable information about the performance of the US economy.
Long position (buy) EUR/USD: example of a buy. The US job market appears to be in decline. You believe the level of non-farm payrolls will be lower than analysts’ estimates and expect the US dollar to weaken against the euro. For this reason, you decide to buy 1 lot ($100,000) of EUR/USD at 1.2101, which is equivalent to a $10 lot for every move of 1 pip.
The Non-Farm Payrolls (NFP) report was released, and its numbers turned out to be weaker than experts estimated, causing the US dollar to decline. The EUR/USD currency pair is currently trading at 1.2152 points and you decide to close the deal.
A comprehensive guide for beginners to trading in the market
Step 1: Get to know the Forex market The first logical step is to get to know the Forex market, including:
- Forex market structure
- Forex market participants
- Important terms
- Factors that influence and move the market Understanding the basics of Forex trading will help you understand the risks and rewards available, build your trading skills and help you use important trading tools and resources.
Can you trade forex with $100? The size of the position required to be opened in Forex is calculated in contracts. For example, in currency trading, 1 lot (lot) equals 10,000 units of the base currency. The minimum contract is 0.01. If the actual rate of GBPUSD is 1.28, you would need $128,000 to buy 100,000 GBP.
The minimum lot for the GBP/USD currency pair is 0.01, which means you can buy 1/100 of a standard lot, equivalent to £1,000.
Buying £1,000 will cost you US$1,280. Therefore, we can conclude that a small capital will not be enough to open a trade and make money. The solution offered by your broker is leverage. For example, with a leverage of 1:1000, the trader gets an amount equal to 1000 times the original amount. Therefore, a $100 deposit will turn into $100,000. To open a position with a minimum trade of 0.01 lots, you will need $1,280, which is just over 1.2% of the deposit value and complies with risk management rules.
The contract (lot) and minimum contract size are indicated in the trading asset specifications. You can find this information on the broker’s trading platform by clicking on the “Trading” menu in the control panel to the left. You will have a list of available assets in the “Information about Widget” submenu.
A comprehensive guide for beginners
Is Forex profitable and easy or not?
Yes, Forex trading is profitable, but it is necessary to follow accurate trading strategies in addition to continuing to learn and gain the necessary experience. Perhaps the most prominent of these experiences is in the field of risk management, which allows you to protect your money from losses and problems. By managing risk levels and thus maximizing profits and minimizing losses
How much profit is there from trading?
The first trader uses a high-risk approach, risking 60% of his capital on each trade and targeting a profit of 120%. While the second trader is more conservative and risks only 5% of his account, aiming for a profit of 10%. To make things simple, let us assume that each trader took the same group of ten trades, and that the second trader made a profit.
What is Forex for beginners?
Forex (also known as the foreign exchange market) is a decentralized market in which currency pairs are exchanged one for another, such as the Euro pair against the US dollar (EURUSD) and other currencies, to benefit from their price movements and make money from the price difference. This is done either via Forex. Spot or CFDs.
