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Forex Trading Basics: Everything You Need to Know

by admin Friday, 30 July 2021

written by admin

Forex trading is an international financial market where currencies are traded. Forex trading can seem like a daunting task, but once you know more about how it works, you’ll see that forex profits aren’t so difficult to earn! In this post, we will cover all of the basics of forex trading including introductory information such as what it is and why people trade forex.

What is Forex Trading

Forex is a type of market in which one currency is traded against another. It is the largest and most liquid global market, with an average turnover of over $200 trillion per day.

The forex market can be thought about as being similar to other financial markets such as stocks or commodities where traders buy and sell assets in hopes that they will make money on their investment when it increases in value. In this context, “currency” refers to different types of money like Euros (EUR), British Pounds Sterling (GBP), Canadian Dollars (CAD) etcetera but you may also hear people refer to forex trading specifically as exchanging currencies rather than just basic trade between two countries.

The Pros and Cons of Forex Trading

One of the benefits of Forex trading is that it is open 24 hours a day, five days per week. This means you can trade currencies when markets are available in your region and time zone. Another benefit of forex trading is the ability to leverage higher position sizes than other asset classes with relatively low margin requirements because traders do not have any capital at risk for “long” currency positions: they only need enough money to cover short positions or their initial deposit amount if they start off as “flat”.

The disadvantages of Forex Trading include increased risks, such as fluctuations in interest rates, political conditions, trends, and unforeseen events. There is also market volatility which can lead to an increase in transaction costs and slippage due to bid-ask spreads widening during times of high volatility.

How to Start Forex Trading

Or how does Forex trading work? Forex traders have a variety of tools at their disposal including charts, prices, indicators, and key levels. Forex trading is not limited to any particular time or space; it is open 24 hours a day all around the world. There are three major markets that trade in forex – the US Dollar (USD), Euro (EUR), and Japanese Yen (JPY). The most common pairs traded are EUR/USD, USD/JPY, USD/CAD.

All you need to start Forex Trading is an internet connection with some spare cash on hand for deposits into your broker’s account! It may take some getting used to but once you’re comfortable with how everything works then there is no limit as to how much you can earn.

There are a number of popular online Forex brokerages in the US – FXCM, Interactive Brokers, Plus500, and OANDA.

Tips for Successful Forex Trading

In order to be successful at Forex trading, you need to be disciplined and understand the risks you are taking. A number of traders make a living trading Forex but this is not easy, it takes a lot of work! Some of the most successful Forex traders have spent over a decade perfecting their craft.

Before you get started, here are some tips to help you along the way:

Know your risk tolerance and goals before you start trading.
Don’t take your losses too hard and don’t worry when you make a profit.
Always have a plan and know how much to risk before each trade, that way if the market goes against you it won’t be too devastating.
Add some variety by trading in different markets – this will help to reduce any one particular risk factor coming into
Set stop-losses to limit potential losses
Have a set amount of time each week where you are only allowed to trade so as not to let it take over your life

Is Forex trading profitable?

Some people believe that forex traders need to be clairvoyant in order to predict which way markets are going to move instantaneously when there may not even be immediate news on an event affecting currency values. There have been many analyses performed by experts who claim this is actually possible with disciplines like Elliott Wave Theory, Fibonacci Retracement Levels, and Classical Chart Patterns among others – they take into consideration everything coming before a price movement happened (such as volume, economic data, historical charts) and use it for future predictions about what might happen next.

How much money you make with Forex trading depends on a number of factors including your broker, your trading platform, and the time you spend analyzing markets. Forex traders are in constant competition with each other to buy or sell currencies for profit. They all have different goals – some trade stocks while others hedge against risk, and still, others speculate on whether they think a particular currency will go up or down in value. The differences between these types of traders are how much money they use to make their trades and what kind of risks they take when making them- not if it’s “easy” or “hard”.

Forex Day Trading Risk Management

With any investment, risk management is important. There are a number of tactics you can employ to reduce the risk on trades and keep your losses at bay. The most common strategies for Forex traders are to utilize Stop Loss Orders and Limit Orders. Stop-Loss Orders automatically close out positions when they reach a certain value, preventing any further loss in case things go wrong for whatever reason. Limit Orders are essentially the same thing but instead specifies a price below which it won’t execute; if prices do drop then this kind of order will ensure your position isn’t closed too soon because you might just get lucky with another rise.

Forex Day Trading Strategy

Forex Day Trading Strategy is about having patience and understanding that trends take time to develop. If an opportunity arises during trading hours (e.g., stocks or currencies) then make sure you have enough capital to act on your decision rather than waiting until the next day as some opportunities may not last! When you’re asking “Is Forex Trading Profitable?” It’s important to distinguish between day trading and long-term trading. It’s also important to understand how many pips can be made or lost on trade and to know the risks.

Hypothetical Scenario

The major risk is that once an order has been submitted, there is no guarantee it will be filled at all. In this case, brokers often offer traders stop-losses (as discussed above) which can limit their losses if they are unable to execute their trades as planned. A stop-loss is simply where you specify how much you are willing to lose before exiting your position – for example $500 per pip of one currency traded (e.g., USD/CAD).

This means that if CAD rises by 50 pips against USD then the worst trader could lose up to $250 in this instance ($500 x 50 = 25000) but any trading system is going to have losses at some point.

The forex trader is only risking the difference between the entry and exit points, meaning that if a trade goes against you then your actual loss is limited by how many pips are left before exiting – for example $500 per pip of one currency traded (e.g., USD/CAD).

In this instance, we’d be talking about a maximum possible loss of up to $250 in our above example ($500 x 50 = 25000) as opposed to losing say an entire lot of 100,000 units (100,000 x 500=USD$50, 000)!

Trading Leverage

Finally, it’s also important not to forget those margin requirements vary from broker to broker but can be a very useful tool for forex traders.

In this instance, the broker is lending you money to trade with in exchange for collateral – which is usually held as margin requirements (e.g., $500 per pip of one currency traded).

The benefit of trading on leverage is that it allows us to open trades at much bigger sizes and thus take advantage of movements on a larger scale than if we were limited by our own funds alone. It’s worth noting, however, that there are also risks involved when trading leveraged positions: namely increased volatility due to large price swings and potential losses caused by uncontrolled risk exposure.

Trading Currency Pairs

The base currency is the first one quoted in a pairing, and it is usually considered as an investment. It is “stronger” than its corresponding quote because each unit of that currency will buy more units of the second or quote currency rather than less.

In Forex trading, most people refer to the major pairs: EUR/USD, USD/JPY, GBP/USD, and AUD/USD.

These pairs represent the most liquid markets with strong liquidity both ways – meaning traders can easily purchase either side for their trades to be executed quickly at good prices. This also means they’ll have plenty of opportunities when using these currencies for different trades.

Slippage Larger Than Expected Loss

Slippage occurs when a trader does not get the price they expected from entering or exiting a trade. This is most common when entering trades, which often happens via market orders.

When a trader wants to enter or exit the trade at their desired price but doesn’t get it, they could have experienced slippage and may be worse off than expected. This can happen because of many factors such as time sensitivity in their trading strategy or even due to other traders with more liquidity taking out large positions before them.

Once the order is put into the market, there’s no telling what will happen – this creates uncertainty for both buyers and sellers. The bid-ask spread also has an effect on pricing by not always being unified either way (i.e., if you’re buying money goes up).

Most Forex brokers offer quotes in pips, meaning a price is quoted in terms of the number of pips between the bid and ask. It’s important to note that brokers often have tiered pricing structures such as tight-spread trades which charge less per pip than standard trades.

Transaction costs are also an aspect worth mentioning; if you’re using one broker for all your trading needs, this may not affect you but it may be wise to shop around.

Forex Millionaires

All around the world, young people are becoming millionaires by getting their hands on Forex profits. Luke Blackburn (https://www.thesun.co.uk/news/10103772/college-drop-out-forex-millionaire/) has made so much money that he now teaches people how to do it themselves.

Sandile Shezi (https://g.co/kgs/AGYnCi) is 24 years old. He has a net worth of more than 2 million dollars. He learned the business by reading articles and attending seminars. Sandile Shezi created a training program to help people become professional traders and make millions.

Louis Tshakoane is a wealthy businessman who became successful by trading on the Forex market and with cryptocurrencies. He was born into a rich family, but he kept working hard to keep up his way of life.

Louis started a business called Botho Gym. He worked with Richard Branson, who helped him start the business. One of the motivations for starting Botho Gym was to keep young people from doing street crimes and drug abuse. These are common in his neighborhood. He wrote the book Forex Millionaire in 365 Days and it has already earned him 2 million in sales. He does not tell anyone how much money he is worth.

The World’s Richest Forex Traders

The World’s Richest Forex Traders. It’s not a coincidence that the world’s richest forex traders are also the world’s richest people. George Soros, Paul Tudor Jones, and Michael Marcus have all made fortunes trading forex. Their success has helped them create even more wealth for themselves than they could ever possibly make on any other venture or industry in life. It is because of this vast amount of money that they have amassed over time due to their innovative way of thinking about finances and risk.

In one of the most famous trades of all time, George Soros shorted the British pound in 1992, earning him $2 billion when he was competing against a currency speculator who had earlier talked about how one should never bet against an Englishman.

The Top Forex Profits Trading Books

– “Inside the House of Money: Top Hedge Fund Manager Tells All” by Steven Drobny

– “A Complete Guide to Day and Swing Trading With Technical Analysis” by Kathy Lien

– “Forex for Beginners: The Ultimate Guide To Understanding Foreign Exchange For Profitable Results” by Tommy Butler Jr. & Desmond Marshall III

Also read about various trading strategies.

Friday, 30 July 2021 0 comment

Blog Learn to Trade

Is Forex Trading Profitable Today: How to Trade and Double Your Forex Money

by admin Wednesday, 30 June 2021

written by admin

Forex Money; One question that often comes up frequently in the forex trading industry is: Is Forex Trading Profitable Today?

Often than not, this question comes from retail forex traders who’re not making it headways due to their flawed trading approach.

Whether you’re using a proven trading strategy, a trading strategy is more important than the strategy

you’re using to trade.

However, some traders take it the other way round.

So, if you’ve been wondering whether forex trading is profitable or wondering if forex trading is safe, the

answer is pretty straightforward: yes, forex trading is profitable today!

However, you might find it difficult to trade and make profits always.

Like in any other currency trade and other markets by extension, even the most season trader hit a

snag and slid into some kind of losses.

Sounds scary? Probably not!

Due to the uncertainty in the forex exchange markets, wins and losses come randomly. As such, your profits and losses are always randomly spread.

However, with a tried and proven trading approach and a profitable trading strategy, wins can turn out more often than losses.

How to Double your Money in Forex Trade

Typically, to trade forex and make profits, you should use some of the proven ways that

can help you double your money more often.

Are you wondering how to trade forex and double your money? Even though it could sound a

bit tricky, you shouldn’t worry.

We’ll walk you through some tricks and hacks to help you trade forex and double your

money with any forex broker.

Ready to get started?

Here are some of the ways to trade forex and double your money.

The Easy Way to Double Your Forex Money

Keen traders know it takes a lot of work and time to see their forex money double.

So, while it’s possible to increase your profit, it doesn’t happen overnight; it rather requires patience.

Fortunately, there are no hard and fast rules to follow – no need to learn about confusing strategies or follow complicated charts.

The best way to go about it is to open forex savings account in a currency with a higher interest rate.

The interest rate will slowly accumulate, increasing your compound interest and subsequently increasing

the money in your trading account.

Rule of 72

How long will it take for your money to double? That’s where the rule of 72 comes in handy.

With the “Rule of 72,” you have to wait for many years to watch your money double.

However, you don’t have to follow complex chats and advanced techniques to get your trading going.

This rule lets you calculate the actual number of years required to see your money double.

Thus, the number of years needed to double your investment equals the value of 72 divided by the expected rate of return.

Therefore, if long-term patience isn’t your type, you can try using other techniques discussed in this article.

Common Pitfalls

This trick comes with its own pitfalls, though. Like the high-return and high-risk investments, currencies

with the highest interest rates usually experience steep inflation rates, which could depreciate their value too.

But if you pick a currency with a fairly stable interest rate, you’ll be good to go.

Suppose you’re based in the US, opening a savings account may not be ideal since the US dollar can

reduce the interest rate by rising in value against your currency down the line.

On the other hand, if you live outside the US, a savings account could work perfectly for you and help double your money in a few years.

Furthermore, the US offers extremely lower interest rates expected to worsen in the coming years.

But the dollar is considered more resilient as it can retain its value during hard times and appreciate with time.

The Classic Way

The classic way is an investment strategy used by many in the old days.

The method involves buying stocks without leverage, charts, real-time news, and trading on margin and holding it down. Many old-school traders employed this strategy and ultimately doubled their accounts.

You can use this method as long as you trade in low-risk markets.

In this case, buy low-quantity currency pairs and hold them for months or as long as you need to realize high returns.

Forex trading offers almost unlimited profits and losses. However, it requires self-discipline,

education, and dedication to succeed.

Using the conventional 1:2 Risk-reward Ratio

If you use a risk-reward ratio of 1:2, you will likely double your investment in just 35 trades, presuming

you analyzed the market properly and don’t have losses.

Below is how it works.

Opening Balance: 1000
Trade 1	1020	Trade 19	1457
Trade 2	1040	Trade 20	1486
Trade 3	1061	Trade 21	1516
Trade 4	1082	Trade 22	1546
Trade 5	1104	Trade 23	1577
Trade 6	1126	Trade 24	1608
Trade 7	1149	Trade 25	1641
Trade 8	1172	Trade 26	1673
Trade 9	1195	Trade 27	1707
Trade 10	1219	Trade 28	1741
Trade 11	1243	Trade 29	1776
Trade 12	1268	Trade 30	1811
Trade 13	1294	Trade 31	1848
Trade 14	1319	Trade 32	1885
Trade 15	1346	Trade 33	1922
Trade 16	1273	Trade 34	1961
Trade 17	1400	Trade 35	2000
Trade 18	1248

Advantage
The position trading and the long-term trends of currency pairs don’t affect their course.
With time, you’ll learn how to identify the market cause, sell, or buy only on pullbacks, and the process will become easy as you trade.

Common Pitfalls

The 1:2 risk-reward ratio isn’t constant and varies depending on your scope of knowledge in the trading market and risk appetite.

Since this method of doubling your income relies on accuracy, this strategy’s effectiveness depends

on your trading methods.

Going the Speculative Way

Contrary to the classic way, the speculative way involves high-risk short-term trading. In fact, what

sounds like noise to a trader focusing on a long-term goal is what intrigues a speculator.

If you’re a risk-taker/ speculator, you may find yourself attracted more to the speculative trading method.

But, you still have to follow all risk and money management principles to mitigate some avoidable risks that can result in losses.

This trading approach is the riskiest as it relies on short-term price changes that are almost impossible to interpret even for trading experts.

Using the speculative approach, you’ll have to select a risk-reward ratio most suitable for your trading style and risk appetite.

The main difference between speculative and classic trading approaches is the frequency of trade.

Assuming you went with the 1:2 ratio, take high-risk trades in a sequence and close down at 35 trades in a

few days to see if you can hit the spot once you complete the 35 trade cycle.

But still, is forex trading profitable? You might ask.

Here is the most preferred way to trade forex profitably.

The Best Way to Get a Double Profit on Your Money

Whether you’re an expert or a newbie, cracking the 35 trade cycle is a game of chance.

However, you can easily double your profits in a short time if you use a good trading strategy.

You can use an indicator, Pipbreaker, to achieve this purpose.

This indicator has built-in functions for long-term trading, short-term trading, and scalping.

In addition, the Pipbreaker generates signals with matching accuracy, enabling you to realize the

expected returns every time you invest.

The indicator also produces much more precise signals than other indicators, making it highly effective and reliable.

The Pipbreaker is resistant to market upsets and can help reduce your losses, giving you a safe

environment to double your money.

How to Outdo Market Uncertainty for the Best Trading Outcomes

Is forex trading profitable? Given the uncertain nature of the market, it is normal to worry about your investment.

What will happen once you start trading? Luckily, there are tips to help you navigate the market uncertainties

Master the game of probability – Like a coin, the market is two-sided, and you’re never 100% sure of the outcome.

So you either succeed or fail – the probability value varies from 0.01 – 99.99 percent, depending on your interpretation and analysis.

Embrace the market uncertainty – Another way to outdo market uncertainty is to be well-informed of the

market setup and understand what heightens the uncertainties. Sometimes, the most uncertain

times can lead you to greater opportunities if you diligently take advantage of the situation.

Take a break when you’re not certain – The forex trading market is characterized by several factors: interest

rate, technical trend, inflation, and GDP, which are usually unstable. When these factors align, you can enjoy trading and possibly increase profit.

However, this state can quickly change without you having the slightest idea, and with the spirit of

trading still high, everything would sink. It’s also hard to figure out if the trend will consolidate, continue,

or reverse at the very time, so it is better to stay out and watch.

Final Thought

Is Forex trading profitable today? A precise answer is yes! But, it will depend on your trading approach,

trading strategy, your trading discipline, and to some extent, the trading platform you use for your trade.

While there is no guarantee to rounds of winning in every trade, you close in forex markets,

using tried and tested trading approaches compounded with a good trading plan and discipline pays off.

And with the money doubling strategies, you can always double your money through forex trade and even trade forex trade for a living.

Wednesday, 30 June 2021 0 comment

Blog Learn to Trade

IS FOREX TRADING EXPENSIVE?

by admin Wednesday, 30 June 2021

written by admin

FOREX TRADING EXPENSIVE; Of course, but the real question is: “Is forex trading worth it or not?” It is not about how much money is necessary to start forex trading. The key thing you want to know about is how much money you can earn along the way.

Sure, “expensive” and “cheap” are subjective terms, but knowing how to trade Forex with $100 is a form of art.

There have been some brokers in the past who have allowed traders to open accounts with $5, but

this is no way to do business. Is forex trading expensive? Is forex trading worth it? It depends on the trader,

but does it have to be?

What Does It Look Like To Be A Forex Trader?

So, what does it look like to be a forex trader? If you’re just getting started with the business, this is one of the questions you might be asking yourself frequently.

But look, it shouldn’t be a head-knock on the wall as we’ll make it pretty easy for you to understand exactly what your work would look like.

Sounds great, right?

Let’s begin…(FOREX TRADING EXPENSIVE)

As a forex trader, you must learn how to be a great risk manager. Since huge gains can be made

overnight and lost within the same span,

you must know how to manage your trades is the best possible way to break even. With that in mind,

any miscalculation could result in enormous losses of your gains.

Does it mean forex trading is an incredibly risky venture? Absolutely not! In fact, forex trade is less

risky than other forms of currency trades. Ideally, if you spread your trade properly, you are likely to make good profits.

However, if you invest too much to make up for a string of losses in the trade, your chances of losing

your capital and finally bowing out of trade could be higher than you could imagine.

Apart from risk management, as a Forex trader, you will be entering and managing the orders.

This is one of the critical aspects of your trade. At this point, you should do your homework right and identify a profitable trading strategy with a verifiable edge.

Also, it would be best if you decided on the currency to trade and the style of trade. With your trading style, you can execute your trading plan, complete with where you’ll exit, and cover for your losses.

Essentially, you’ll be entering your orders, managing your trades, and picking up your trades as per your plan. Without a profitable plan, your Forex venture is meant to fail.

Is Forex trading expensive? You might ask. To put it precisely, Forex trading isn’t such an expensive venture. But it would be best if you got started with some reasonable amount to fund your orders.

However, the minimum amount you can play on currencies will always depend on the platform on which you conduct your trades.

In addition to placing your orders and managing your trade, another critical aspect of successful Forex trading is money management.

Since you may not always be 100% sure your next order will win, managing your money can be savvy.

How can you manage your Money on Forex trade?

It’s pretty simple!

If you’re trying to invest huge chunks of money, you can get a smashing win when the trade outcomes favor you.

However, in case of a loss, a high-risk trader will always lose enormously. Since losses and wins come randomly, that’s where Forex money management comes in.

Overtrading and trading too much is a bad forex money management habit. Similarly, high-risk trading is equally a result of bad money management.

Interestingly, learning how to manage yourself is pretty straightforward and requires no special skill set to get started with.

But, it all starts with setting up your plans, practicing them, and sticking to them even when things don’t seem to be going right.

Sounds a bit tricky?

Yeah,…at times, you have to stay on course by following tough decisions.

While having a clear set goal and investment patterns might seem uneasy at first, you’ll get used

to it with time. And finally, it will become a new norm in your day-to-day forex trade.

The Best Mindset For A Successful Forex Trader

When it comes to trading mindset, you can find many books detailing all kinds of mindset to keep you on a successful course.

But, the trading mindset is of little or no value when you’re operating on a flawed strategy.

With a tried-and-tested strategy with a proven edge, the right mindset puts you right in the success

trajectory. Below are four essential mindsets that every Forex trader should have.

Focus on long-term goals and avoid getting worried about the daily fluctuation of the market prices.
When trading profit or losses, you should understand it’s part of the process to grow your account.
Proper risk management can help you grow your business and last long in the tradewhichwhile failing to follow risk mitigation plans offers you the quickest way to par with your hard-earned money.
Understand how fear and greed can negatively impact your business and learn how to control your trading habits.

By understanding these four important mindsets in the Forex trade, nothing would be a surprise.

You can jot down the four points on a piece of paper, expound on them and understand how you can implement them into your day-to-day trade.

Can You Trade And Make Profits Consistently?

When making a decision to venture into Forex trading, people find themselves with some common

questions as beginners in the world of currency trade.

Is Forex trading expensive than what I already know?

Can I lose all my investment overnight?

Will I always be sure of profits on every order that I close in?

Well, if this sounds like you, we’ve got all the answers to your troubling questions.

Just like any currency trade, consistency matters in Forex trade. When you become consistent in

your trading plan, you should enjoy the profits that come with the edge of your trading plan.

Now, will you always make profits on your orders?

No.

Due to the uncertainty of the future trade outcomes, you’ll always make profits and sometimes take losses.

You will see your account increase and also decrease at other times. Therefore, the outcomes are not cast in stone.

You may have a losing day, weeks, and perhaps a month.

But, if you focus on the long-term goal based on your trading plan, you can always cover for the losses

in the bad days during your peak profits in the good days.

Therefore, you should have in mind that profits and losses have a random spread.

However, a good trading plan will always guarantee more profits than losses.

If you were wondering, “Is Forex trading safe” or expensive, we got your question answered.

Pros & Cons of Forex

Thanks to the miracle of modern technology, Forex is more accessible to ordinary people than it had ever been in the past. Whereas at one point in time, only major players like banks, corporations, and billionaires had access to forex markets, nowadays, anyone can get in on the action and try their luck.(FOREX TRADING EXPENSIVE)

Compared to the other types of financial markets, Forex is more stable and reliable than most.

Stocks and commodities may fetch a pretty penny, but companies can and do fail after all is said and done, whereas commodities can be quite unpredictable.

On the other hand, Forex deals with currencies, and those are much more difficult to sway or manipulate.

Forex markets also incorporate loads of technology due to their complex nature, and some

traders have even incorporated some of this technology as a part of their trading strategy.

Is forex trading worth all that precious time and nerves? Well, with automated trading, it just might be.

Sure, there are all sorts of ads for automated trading software, saying how they can make you a millionaire in

six months or something like that.

Yeah, right. If that is true, how come they have to make their own money selling their junk online to people like you?

Why are they not somewhere in the Caribbean? No, things do not work that way.

Don’t misunderstand, the idea of making forex trading worth the hassle by teaching a machine to trade on

your behalf is not exactly new – and not half bad, either.

It would eliminate human emotions such as fear or greed out of the equation and make decisions much more efficiently than any human trader.

Nevertheless, using automated trading signals and other programs as a tool to help you out can definitely make forex trading worth your while.(FOREX TRADING EXPENSIVE)

Then again, even Forex is not for everyone. Losses are to be expected, and even the most successful forex traders have lost crippling amounts of money.

Also, many critics have drawn comparisons between Forex and gambling, and for all we know, there just might be something to all these claims.

Finally, some people just aren’t suited to all the pressure and challenges that forex markets have to offer.

These and many other reasons are what stand in the way of so many people out there, preventing them from achieving their dreams. To those people, forex trading is definitely not worth it.

Other people, however, have been known to trade successfully with as little as $100, or so the legend goes. We say legend because a story about a guy who started with $100 and became the next Bill Gates would not even make it as a science fiction novel. For one, the importance of education cannot be overstated.

How to Trade Forex With $100

In order to turn $100 into a success story, a trader would need a lot of skill, luck, and experience. Good trading strategies do not simply come to mind; they must be learned, adopted, and applied with tactical precision.

The truth behind this number is the fact that most brokers require a minimum deposit, and $100 is the most common figure out there. Is forex trading worth it on a $100 budget?

Normally, most trading strategies recommend limiting your trades to 1% of your total capital, or 10% if you are quite optimistic about things. In this case, a person with a $100 capital would be making trades that are in the $1-$10 range, so becoming the next Warren Buffet may be put on hold for quite some time.

Also, keep in mind that there will be losses. The thing that prompted so many people to wonder if forex trading was worth it was the fact that sometimes, even if you win, you lose. Are you still asking yourself is forex trading worth it?

In fact, the only way to even consider making Forex worth your while with $100 capital is to employ an extremely aggressive strategy, trading micro lots and disregarding your traditional forex wisdom.(FOREX TRADING EXPENSIVE)

This does not mean that taking $100 and turning it into $200,000 within a year is impossible, with the right kind of experience and some careful planning. So, is forex trading worth it? The $100 that you are risking, I mean? Well, if so, here is how you do it.

First of all, get some practice on a demo account, preferably with the same broker you plan to use for actual trading.

In fact, practice a lot because you will be doing real manual trading: no machines, automated software, or exotic currencies.

Focus on EUR/USD, but any other major pair should work as well. The actual strategy is very straightforward.

The first thing you want to do is split your money into two equal shares. One is for trading, and the other is basically your plan B – a way to recover from a bad trade.(FOREX TRADING EXPENSIVE)

For starters, you use $50 for trading, and the rest is your recovery money.

Normally, you are not supposed to do this, but since you are risking a small amount of money, you need an aggressive strategy in order to get ahead.

The next step is to go through the analysis of news, charts, and all sorts of predictions you can find.

Don’t worry, your predictions tend to get better as you accumulate experience.

Basically, you go through the charts and the news to figure out your next move. But you only trade when the odds are in your favor –

if the charts are not looking good, take the rest of the day off. You only trade when the market is volatile. The more up-down-then-up again action you see, the better it gets.

With some practice, the right currency pair, and under favorable circumstances, you should be right 9 times out of 10.

And on that 10th time, make sure you close your orders within a 15% loss.

Don’t worry. These are small quantities of money, and any such losses can be recovered easily.

If you do this right, your capital should double every month or so. Within 6 months, you should be trading with roughly $6,500.(FOREX TRADING EXPENSIVE)

Within a year, anything between $200-400,000 should be attainable. The $200,000 sum would account for any losses, and the $400,000 is the best-case scenario.

What Are My Exact Costs?

The exact expenses depend on a lot of things, including the broker you choose, the kind of trader you are, your trading habits and positions, and a bunch of other stuff.

Most brokers feature an automatic calculator that can help you calculate your exact expenses, so

you should have no problems in finding out is forex trading worth it or not.

As for the exact costs, they vary from broker to broker, so it is impossible to pin them down in actual numbers.

Commissions can range from 4 cents on major currency pairs for 1k lot and go as high as 6 cents on more exotic currencies or even higher.

Spreads can be 0.5 for major currency pairs or 175.00+ if you trade exotic currencies. Here is a chart with some basic expenses that should give you a clue as to what you’re getting into.

Currency

EUR/USD

EUR/JPY

USD/CAD

EUR/GBP

USD/JPY

USD/CHF

EUR/CHF

Average spread (pips)

1.8

2.4

2.3

1.2

1.6

1.9

2.5

Commission

–

Total cost of a 1k trade

18 cents

24 cents

23 cents

12 cents

16 cents

19 cents

25 cents

Total cost of a 100k trade

$18

$24

$23

$12

$16

$19

$25

Total cost of a 1M trade

$180

$240

$230

$120

$160

$190

$250

Common Forex Trading Pitfalls And How to Avoid them for a Successful Business

Have you ever wondered why some people make it in the Forex trade business while others can hardly end up with some profit?(FOREX TRADING EXPENSIVE)

Well, the difference comes about in the knowledge one has about the trade. Yes,… the knowledge about the“Does” and the “Don’ts” in the field of Forex trading.

And that’s what makes many beginner Forex traders end up with many days of losses rather than profits.

By knowing some of the common pitfalls to avoid in the Forex business, you can avoid them and focus on major points of strength to boost your profit margins.

Below are some of the most common trading blunders that you should watch out for and avoid by all means.

Get-rich-quick mentality

Successful forex trade takes patience, effort, and self-discipline.

However, the novice views Forex trade as the shortest way to get rich quickly, forgetting the time, risk, and effort invested by individuals to achieve such lucrative gains.(FOREX TRADING EXPENSIVE)

Believe it or not, staking large sums of money in an attempt to gain overwhelming profits will likely

land you in tremendous losses as you will at one point incur a loss in the trade.

In the long run, such habits can lead to you losing all your money in the trade due to greed. Therefore, trade wisely and follow a proven trading plan while focusing on a long-term goal.

Overusing Leverage

The opportunity to make trades on margin is one of the most enticing many traders. This can also be referred to as leveraged trading.

Ideally, leveraged trading allows you to invest a small amount of money and to get more profits as if you had made a nominal investment on such trades.

Since Forex involves a high degree of leverage, trading on too much leverage can land you into

serious losses that can eat into the entire investment.

Random decision-making

Successful Forex trading requires a well-defined trading strategy. In fact, you should know when to open and close your position based on a specific system before getting into the trade.(FOREX TRADING EXPENSIVE)

Having an elaborate trading plan eliminates losses by having a stop-loss order and saving you from second-thought guessing.

Also, it’s important the markets may not work as you expected at first but later work in your favor.

Ignoring the use of Stop-loss

Forex trade dynamics can bring you losses at one point and profits in a turn of events.

However, some beginner traders hold onto their losing positions longer than necessary, hoping to recover

the gains when the markets shift in their favor.(FOREX TRADING EXPENSIVE)

Such traders tend to leave their winning positions too quickly towards locking in instant profits.

While you might be tempted to have such a mentality, it’s imperative to be patient and make perfect entries.

If the trade turns against you, you can make a wise decision to cut it quickly or run with it.

Cutting off the trade can, in some circumstances, save you from costly ventures.

Trading on Emotions

Many novice traders make a trading decision based on their emotions rather than the objectivity of the judgment.

And the result is pretty obvious! They are more likely to last in the business for a short time before diving headfirst into losses.

Long-term and profitable Forex trading requires a sound mind and focus on relevant events.

To stay on the safer side, identify your market, monitor your position, master a profitable

trading discipline, employ money management, and avoid the pitfalls we’ve discussed earlier in this article.

Bottom Line

Is forex trading expensive, worth it or not? The answer depends on you and you alone. Between the running costs, possible profits, and all sorts of other ventures out there, there is no way anyone can decide in your stead. It all depends on whether or not you can make enough money to cover all of the expenses and prosper, or not. If so, welcome aboard. If not, good luck with your day job. Don’t quit it just yet.(FOREX TRADING EXPENSIVE)

Wednesday, 30 June 2021 0 comment

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BEST FOREX BROKERS FOR BEGINNERS

by admin Wednesday, 30 June 2021

written by admin

Introduction

Are you new to Forex trading and looking for the best Forex brokers for beginners to get started with your Forex ambitions? If so, you needn’t worry. We’ll walk you down to successful Forex trading.

While there are many Forex brokers out there, not all are beginner-friendly. Some may have a

high minimum investment amount that only advanced traders can afford to stake such amounts.

But is it wrong to start with advanced Forex trader brokers? You may ask.

Like it is in any profession and job group, the level and amount you can trade with successfully largely

depends on the level of knowledge you have in the world of currency trade.

Therefore, as a beginner, it’s imperative to start with the best Forex broker for beginners and

advance with time as your mastery and understanding of the trade elevates.

After deciding on the currency for your trade, trading style, and a trading plan, the next critical step

involves choosing the best Forex broker that matches your trading needs.

What Is a Forex Broker? Here’s What You Should Know Getting Started

Are you wondering what a Forex broker is? Perhaps you’ve heard and read about forex brokers

but don’t have a solid idea of what is exactly.

Well, let’s delve deep into it!

A Forex broker refers to a service company that offers forex traders a platform to buy and sell foreign currencies. Sometimes, a forex broker is always referred to as a currency trading broker or retail forex broker.

Essentially, trades in the forex market take place between a pair of two different currencies.

The exchange market is a 24-hour global market that features a continuous shift in currencies’ value.

Without a forex broker, forex trade would be overly complex and expensive in terms of processes and the overall cost involved.

What are the Roles of a Forex Broker?

Well, now that you understand who a forex broker is, the next critical step is to understand their roles in the Forex trade.

Basically, most forex trade takes place between a pair of currencies from the G10 countries. The G10 nations and their currencies include:

S Dollar (USD)
Euro (EUR)
Sterling/ Great British Pound (GBP)
The Japanese Yen (JPY)
Australian Dollar (AUD)
The New Zealand Dollar (NZD)
The Canadian Dollar (CAD)
The Swiss Franc (CHF)

While some brokers allow traders to use the above-listed currencies, most brokers allow their

clients to trade in other types of currencies, even the emerging currencies.

Therefore, it would be important to check the currency options that your broker allows before signing up for the platform.

When getting started, you’ll open an account with your preferred broker, buy a currency pair

to open a trade, and then close your trade by selling the already bought currency pair.

After closing a trade, your trade outcome can either be a profit or loss. For instance, when you

buy a currency pair after its prices flopped and closed the trade at peak prices, you’ll make a profit.

Similarly, closing a trade at the point prices are lower than you bought the currency pair, you’re most

likely to take losses. But since you’re focusing on a long-term goal, losses and profits are always randomly distributed.

With a valuable trading strategy, plan, and the best forex broker, your chances of ending up

with a significant profit at the bottom line are endless.

Getting Started with the Best Forex Broker for Beginners

Now that you have mastered the Forex market’s essential aspects, you have the drive and focus

on directing your energy to succeed; what next?

Choosing the best retail forex broker for your venture!

But, guess what? Forex is likely to become your favorite playground!

However, for a novice like you, knowing the right forex broker for your Forex trading venture

could be a bit tricky if not overwhelming. But you don’t need to worry.

We’ll help you select the best Forex brokers for beginners to avoid the possible tricks and frauds in forex trading.

This forex guide is a kind of currency trading for dummies that will simplify and

underline all the necessary steps to take. If you follow the steps, you won’t be having a

headache choosing a reliable broker.

Here are some important and frequently asked questions that many newbies like yourself may ask.

The answers will surely be useful in narrowing down your choice among forex brokers designed for beginners.

You’re one step away from becoming a successful trader, but make sure to select a

broker who will offer reliable services based on your needs.

The first thing to do is to select a trusted forex broker for beginners. But an inexperienced trader

may ask: how do I check my forex broker?

5 Proven Tips for Picking Best Forex Brokers for Beginners

If you’re a trader committed to doing a

Successful business through the foreign exchange market, many forex brokers are looking to

winning you to their online trading platform.

If you happen to visit any popular financial news site, the chances are high that you’ll be

bombarded with many adverts from forex brokers looking to add more traders to their platform.

But how can you cut through the noise and choose the best forex broker for your business

without getting lost in the clutter?

Well, below are some of the critical things to look at when choosing the best forex broker for your

foreign exchange trading venture.

Ready to get started?

Let’s explore some of the essential things you should look for before settling down on a choice.

Regulatory Compliance History

Before deciding to trade on any broker platform, checking on their reputation is of utmost priority.

Reputation helps you to know what your trading experience on their platform would look like.

Reputable and trustworthy forex brokers are registered by recognized foreign exchange trade

bodies such as National Futures Association, also known as NFA.

The National Futures Association is a reputable organization for the futures industry.

Also, the broker should be a member of the Commodity Futures Trading Commission, commonly

abbreviated as (CFTC). This organization regulated the commodity options and futures markets across the USA.

Apart from the US, each country has its independent and regulatory bodies that any reputable broker

in those countries should be registered with.

A compliant and duly regulated broker ensures the safety of clients’ deposits, eliminating the

potential security issues regarding traders’ deposits.

If you’re wondering how you could separate duly regulated platforms from those that are not,

it’s pretty simple. Just navigate their website and check on the “About Us” section and find out if

the broker has provided their NFA and CFTC number.

A duly registered broker will always display their relevant registration numbers and other

regulatory certificates to show their compliance and commitment to their clients’ deposits’ safety.

Therefore, be wary of a broker with no registration or license numbers displayed on their website.

Features of the accounts offered by the broker

Each forex broker offers different account features on their platform.

However, these four essential features can actually be a deal-breaker.

Let’s delve deep into the four essential aspects you should look at before making up your

mind to trade on the broker platform.

Margin and leverage

Depending on your forex broker, you can be allowed access to leverage in their margin account.

With access to the leverage provided by your broker, you can hold higher positions with a small amount of stake.

For instance, with $1,000, a trader can use leverage like 50:1 to hold a position valued at $50,000.

However, the ratio varies depending on the broker. As such, some may offer lower ratios, others may offer as much as 200:1.

Leverage can offer a great boost to traders’ profits in multiples.

But, it can also damage the trader’s account by magnifying losses if the trader takes a loss on orders placed on leverage.

Therefore, you should master a profitable discipline and avoid overusing leverage.

Commissions & Spreads

This is yet another critical aspect that you should consider before choosing a forex broker account.

Brokers that take commission will always charge a certain percentage based on the spread.

Are you wondering what a spread means? It’s simply the difference between the bid and the ask based

on a forex pair. Spread can either be fixed or variable based on the volatility of the forex market.

Some brokers may not charge commission. Instead, they make their earnings from a wider spread.

As the spread widens, the more you’re likely to make losses.

Typically, popularly traded currency pairs such as GBP/USD and EUR/USD always have a tighter spread than other unpopular pairs.

Therefore, it’s imperative to know how your broker makes their profits and shop around wisely.

Deposits policies

When getting started with the forex trade, the best forex broker for beginners allows a low initial deposit amount.

Some brokers allow a minimum deposit of $50 and give great leverage for traders to hold high-value positions. With leverage, you get incredibly high buying power than your initial minimum deposit.

Typically, many forex brokers offer diverse accounts, such as micro, mini, and standard forex

trading accounts with different minimum deposit requirements to fit different traders’ needs.

Besides the minimum initial deposits, the ease of making deposits and money withdrawal

from your forex account should be of significant consideration.

Since account funding and withdrawal policies vary from one broker to another, a broker may allow you to fund your online account via PayPal, credit card, ACH payments, bank transfer, wire transfer, bank check, personal check, or business check.

Forex brokers may charge a fee on account deposits, or withdrawals, or both.

Therefore, you should be fully aware of what your broker’s charges look like.

For beginner traders, it’s imperative to go for brokers charging low fees while offering great opportunities for successful trading.

The choice of currency pairs offered by the broker

Always go for the broker that offers a great selection of currency pairs that falls within your interest.

While there is a wide range of currency pairs, major pairs such as EUR/USD, GBP/USD, USD/JPY, and USD/CHF are

trade options with the greatest liquidity due to the massive attention.

The Quality of Customer Services offered

Getting stuck on the forex trading platform sucks! Therefore, as a beginner forex trader, opting for a broker platform offering excellent customer support is essential for successful forex trading.

Regardless of better deals offered by the broker, getting the much-needed assistance is critical for your business.

Since forex trade takes place 24 hours a day, a good broker should have 24-7 customer care to assist you anytime,

whenever you need it.

To find out the degree of responsiveness of a broker’s customer support team, you can make a quick call

or try a quick live chat. Doing so will give you an idea of how fast they respond to their client’s inquiries.

Trading Platform

The online forex trading platform is your typical portal to access the forex trading markets.

Therefore, you should ensure the broker platform has all the features you need for an effortless trading experience.

Ideally, a standard platform should have software complete with the fundamental and technical

analysis tool you need for a successful trade. Also, ensure the platform offers an easy way to enter and exit trades.

A user-friendly platform will always have a indicated “Buy and “Sell” button, with others even

including a “Panic” button to help you close all the open positions in your account.

On the contrary, a poorly designed platform user interface can lead to regrettable order entry mistakes.

You can also consider other essential aspects such as order entry types, customization options, strategy

builders, automated trading options, trading alerts, and backtesting features.

Some best forex brokers for beginners allow potential traders to open a demo account on their

platform to master how things work in real-time before opening a real account and funding it.

How do find out if the broker is registered and reliable?

When you open your forex account, you don’t want your funds to be unsafe or stolen.

The smartest thing to do is to check out if your broker is registered with NFA (Natural Futures Association) or CFTC (Commodity Futures Trading Commission) if it is located in the US or FSA (Financial Service Authority) if it is located in the UK.

For the EU regulatory bodies that control EU Forex markets, check out this site: www.tradersasset.com/forex/brokers/european-forex-brokers.

You may also check the broker reviews and forex broker list of customers.

Still, if it isn’t registered in any of these agencies regulated by specific state authorities, you better skip it.

These agencies provide a license that enables a broker to be listed on the market. Keep in mind that a

reliable broker must have a license!

Another thing, a good forex broker must have a good reputation, so it’s also good to look for the opinion on a company’s public image.

Please don’t be lazy to check out the charts of relevant trading platforms created either by real customers or

by experts who share their experience on the official trading websites. Be one step ahead of everyone else!

What is the minimum deposit?

Thankfully, the forex market doesn’t necessarily require a considerable minimum amount to start forex trading.

Since minimum forex deposit allows flexibility, you can start trading with significantly less capital

than required for day trading stocks.

Let’s say the minimum amount goes from none to $10 000.

If you don’t have $10 000, it’s not the end of the world! Most brokers operate multiple account types,

so the traders can choose the category they want to be in (minimum accounts, VIP accounts, etc.).

How Much Money do I Need to Start Trading Forex?

The amount of money you need to start trading is determined by your goals.

It’s not the same if you simply want to increase your account or want a regular income.

With the minimum opening balance, the trick is that people are impatient to let their account grow,

and the risk too much on each trade, but eventually, they lose everything!

Don’t be that impatient and greedy person!

Before trading forex, you need to check out what forex fees are to open a trading account. Some brokers advertise forex commission-free trading but still make money from trades through a bid/ask spread.

So before making any trade, make sure how all the parties involved are being compensated.

Another thing, before choosing a forex broker, you should begin trading with no money – open a

demo trading or a practice account. If bad things must happen, let them happen in a demo world!

The words Learn Practice and Improve on three red dice for betting on your future in attaining new skills to better your career and life to achieve success and goals

Best Forex Brokers for Beginners have demo accounts

On the road to forex stardom, you must practice your forex skills to become a professional trader.

Download a free forex demo account and start earning virtual money! You’ll find a demo account on

every reliable broker’s homepage. You’ll see that an interface is very easy to use.

Test different trading strategies for an unlimited period of time, and find the one that suits your needs.

The best demo account provides you with the same conditions as live accounts but without risks of losing money.

This is a safe environment for the novices like yourself to take their first steps in the forex market.

Besides learning basic aspects of forex, you’ll get the opportunity to become a strategy pro and a good evaluator of broker services using charts, technical analysis indicators, and so on.

When you think you’re ready, having mastered all the essential trading strategies, it’s time to open a free forex trading account with real money.

This live account gives you more than a demo, even with minimum funds, because you’ll start sensing the relationship between the profit and currency movements.

Online Educational Forex Courses for Beginners

If you want to improve your knowledge further, enter an online forex trading course for beginners.

A quality forex webinar will explain the forex market’s basic concepts and the useful fundamental

analysis tools to help you understand how this market operates.

For example, Saxo Bank offers top-quality webinars.

Their free forex trading guides will help you go deep into the forex matter and instruct you on how to avoid investment loss.

The more you know, the less you risk! There’s an endless amount of information online waiting to be explored.

To find the best forex trading course, educational tutorials and articles, seminars, and more…

Forex benefits for new users

Besides demo accounts, most brokers offer welcome benefits for newbies, such as a welcome bonus or no deposit bonus.

All you have to do is sign up on the broker’s homepage to earn your welcome gift.

For brokers, it’s profitable to draw the attention of new traders.

Anyone who hasn’t been registered can receive free forex dollars.

These deposit bonuses are given only for trade, but you can’t withdraw them unless you

fulfill certain conditions of a trade turnover.

The Best Forex Trading Platforms

If you are a beginner in forex trade, the right broker means much more than a platform for trades.

It’s important for you to build an investing base.

The best forex broker for beginners USA / UK offers endless educational courses for

the newbies, fair commissions, and reasonable investment options, as well as strong customer service.

Here’s the list of the most reputable platforms, and you decide what the best forex broker for beginners like yourself is:

Wednesday, 30 June 2021 0 comment

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What Is Forex Trading And How Does It Work: Forex Trading For Beginners

by admin Wednesday, 30 June 2021

written by admin

Many have been said about forex. But, what is forex trading and how does it work? This could be one of your biggest questions when you think about venturing into the business. Perhaps you’ve heard and come across a lot of misleading information about the business.

But, guess what, you aren’t alone. There are thousands, if not millions looking for the same answer. With more than a decade of experience in the currency trade, we’ll help you understand what is forex trading and how does it work?

Let’s get rolling…

What is Forex Market?

Forex, also known as FX, is short for foreign currency exchange and refers to the transaction of converting one foreign currency into another. Most forex traders buy and sell currencies for commerce, tourism, and trading reasons. Notably, the forex market is the largest financial market worldwide, with a daily turnover of about $6.6 trillion as of 2019.

The place where the foreign exchange currencies are traded is what is popularly referred to as the forex exchange market.

What Does the Forex Markets Look Like?

The forex market is a platform where most of the global currencies are traded. Currency trades are performed electronically over-the-counter (OTC markets). Typically, Forex transactions are conducted between traders over computer networks where traders buy and sell currency pairs in a 24-hour market, five days a week, excluding weekends.

Unlike other trades with a centralized market, there’s no centralized exchange market for forex traders. As such, all transactions between forex traders are purely through computer networks.

For instance, if you live in France and want to purchase a product from the U.S, either you or the foreign company you’re transacting with has to pay the U.S product in dollars (USD). Therefore, you’ll have to exchange an equivalent value of euros (EUR) into U.S dollars before you can pay for your product abroad.

When and where was it Invented?

When did forex trade begin? And where did it begin? These are some of the obvious questions a forex beginner will always ask.

Well, let’s make it clear.

While forex trading might sound like a new thing to beginners, it isn’t today’s event. It dates decades back.

Forex started in the earlier days when people exchanged currencies and goods to buy other goods and services. Since then, the market has seen massive transformations, from barter trade to the metal age and eventually to money.

The modern forex market was invented in the early 1970s in the U.S when the dollar was allowed to float freely in the market against other currencies.

What Makes Currency Trade a Popular Venture?

Currency trade is popular due to many reasons: Usually trade, commerce, or tourism. Since currencies vary with geographical locations, using one type of currency to conduct trades isn’t practically feasible. Therefore, you will have to convert your curry to that accepted by your supplier or service provider.

And that’s where currency trade comes in handy.

As such, people can always purchase products and services in foreign markets 24 hours a week without suffering currency barriers.

Apparently, the FX market is considered the world’s most liquid financial market, larger than other asset markets like bonds, commodities, and stocks.

And without mentioning, forex trading has become a popular and convenient way for people to make money online for many people by investing as little as $100 and getting their money back in multiples.

As a beginner, you need to understand how different national currencies work and relate. You can succeed if you are self-disciplined, dedicated, and hard-working.

Forex Markets: Overview

Forex market is the only continuous 24-hour trading market globally. The formally institutional firms-dominated market has nowadays become more retail-oriented, with more traders and investors of diverse volume holding becoming significant participants,

Unlike in the past when banks and other financial institutions acted on behalf of their clients, the recent thrive in the use of the internet for business has given even small deposit traders the opportunity to close trades and make significantly huge profits.

Interestingly, there are no physical markets for conducting forex trade transactions. Instead, there’s a series of interconnected trade terminals made over computer networks.

Unlike other financial markets, foreign currency trade is considered more opaque since disclosures aren’t mandatory since currencies are traded in OTC markets. Additionally, the market features enormous liquidy pools from large financial institutions.

Even though people often presume the country’s economic parameter as a standard criterion for determining the country’s currency value, the notion isn’t true. In one of the studies conducted in 2019, the motives of large-scale financial institutions played a critical role in determining the value of currencies.

How Large is Forex Market?

The forex market is the world’s biggest financial market, with a net worth of over $2.4 quadrillion. According to DailyForex, the daily turnover for foreign exchange rose from $1.2 trillion up to a whopping $6.6 trillion in 2019.

According to data, the most common include the EUR/USD, NZD/USD, AUD/USD, USD/JPY, and USD/CDA.

Traders use the forex market for various reasons – to expand portfolios, speculate geographical events, and hedge against interest rate and financial currency risk. Major market participants include individuals, money managers, commercial banks, hedge funds, and central banks.

Three Ways You Can Trade Forex

Are you interested in Forex trading and wondering, “what is a forex, and how does it work?” Here are three ways you can trade forex and make a profit out of it.

Spot Market

The spot market, also known as the over-the-counter market, is the most significant because it involves actual asset trading for futures and forwards markets. The spot market operates around the clock on an electronic platform. There is no central location of the exchange; thus, traders transact directly with counterparts.

How Does Forex Spot Market Work?

In a spot market, traders buy and sell currencies according to their prices. Supply and demand are the major determinants of price, determined based on economic performance, current interest rates, future currency predictions, and political situations.

Forex Rollover

The rollover trade is the action of rolling a trading position over to the next delivery day. In this case, your trading account is charged an interest rate (the rollover rate) for holding an open position overnight.

Depending on the nature of your trade – short or long position you may get a rollover interest or end up paying the interest.

Forwards and Futures Markets

The forwards and futures are both forms of contracts between two parties used to buy and sell assets within a specified time and price. A forward agreement is customized and private and traded OTC, while a future agreement operates on standardized terms, and the price is calculated every day till the contract ends.

Forex Forwards Transactions

A forward transaction is a contract between two traders to buy and sell an asset on a fixed future date for a preset price. This agreement is private and is often settled at the end of the agreement. Forwards contracts have less strict terms and conditions and are not subject to price changes.

Forex Futures Transactions

On the contrary to the forward’s contracts, future transactions are subject to daily changes. These contracts are transacted on an exchange thus, traders can settle them within varying dates. Moreover, the futures market is relatively liquid than forwards’, allowing traders to join and exit when they need a break.

Forex for Speculation

Speculative trading is when a trader makes a financial transaction with a high risk of losing value but with an opportunity to generate profit from fluctuations that may impact the value of one currency against the other. Although there is a high risk of losing, the trader often focuses on market value changes to offset the loss.

Typically, things like geographical risk, trade flows, economic strength, and interest rates affect the demand and supply of currencies, making the forex markets highly volatile.

Forex for Hedging

What is forex trading and how does it work? Forex trading for beginners. In most cases, there is a certain level of risk involved when you buy and sell commodities to foreign countries, often caused by price fluctuations.

Fortunately, currency exchange platforms provide a way to insure or hedge transaction risk by fixing currency rates to prevent losses. Hedging is generally a short-term strategy to protect an investor’s position when there is a major concern of market volatility.

What Makes Forex Different from Other Financial Markets?

There are notable differences between forex trading and other financial markets, but it might be hard to identify these differences if you have not yet understood “what is forex trading and how does it work?”

However, we’ve done all the heavy lifting for you.

The first difference is that forex investors use pips to track price fluctuations to tell whether the market is going up or down. On the other hand, other financial markets like the stock market use blue-chip stocks.

Forex trading operates around the clock for five and a half days a week, while other financial markets work on a scheduled daily calendar depending on the type of exchange and location.

Additionally, Forex trading offers plenty of strategies to maximize profits in a short period, like scalping and day trading. On the contrary, these strategies are less common in other financial markets since most of them focus on long-term trading.

Understanding Key Terms in Forex: Beginner’s Guide

What is forex trading and how does it work? Before you start learning how forex works, it is important to understand basic terms.

Forex Account: Types of Accounts

A forex account is a type of account you can open with a forex broker to trade and hold foreign currencies. There are three types of accounts based on the lot size.

Micro Forex Accounts – These accounts can trade and hold up to $1,000 of value in a single lot.

Mini Forex Accounts – These accounts can trade and hold up to $10,000 of value in a single lot.

Standard Forex Accounts – These accounts can trade and hold up to $100,000 of value in a single lot.

Currency Pair

In forex trading, you buy one currency and sell another, which mostly come in pairs. A currency pair is an amount a trader would pay per unit in exchange for another currency.

So, for instance, if you’re trading the British pound against the U.S dollar (GBP/USD), it means you’ll buy the British pound and sell the U.S dollar.

Risk

An FX risk is a potential loss that can occur while trading due to market volatility. Common risks in the currency exchange market include liquidity risk, interest rate risk, credit risk, transactional risk, country risk, and more.

Bid

The bid is the price that a trader pays to buy a currency pair.

Pip

A pip (price interest point/percentage in point) is a standardized measure that shows the smallest amount that a currency pair can change.

Leverage

This is where a trader uses borrowed capital to amplify returns. The FX market offers plenty of leverages that you can use to increase your position.

Spread

A spread is what helps you to make a profit in forex trading. It is the difference between the selling and buying price of currency pairs.

Snipping and Hunting

These are inappropriate practices (buying and selling currencies near preset points) by brokers to hike profits. The solution to this problem is to network with other traders to track such patterns.

Getting Started with Forex

What is forex trading and how does it work? Forex trading for beginners. Forex trading can be profitable only if you learn essential skills and understand how to trade correctly without using emotions. Here is how to get started.

Get a strong foundation of the FX market – Do your research and learn the ins and out of FX trading. Although FX trading may sound simple, it requires extensive knowledge to learn how to trade and succeed.
Develop a strategy – Develop a reasonable strategy that matches your finances, situation, and risk appetite. A good strategy will serve as a roadmap to help you predict the market movement.
Open a brokerage account – As a beginner, you may want to open a micro forex account since it has minimal capital requirements. Remember that forex traders don’t charge any fees but earn money through pips.
Be informed – Keep track of the latest forex trading news and market trends not to miss anything that may affect your position.

Conclusion

Forex trading is one of the popular businesses that some people make a living in by trading forex. However, if you’re a beginner in the forex trade, the information discussed in this article should give you an informed startup without having to grapple. At Choose Forex, we endeavor to offer you all the necessary knowledge about the forex trade.

Sources

Wednesday, 30 June 2021 0 comment

News

European shares pulling up

by admin Monday, 1 June 2015

written by admin

It was a good Monday for European shares, thanks to the alleged progress in the negotiations between Greece and the euro zone partners. Chinese stock markets made a five percent rally, and made significant contribution to the European shares jump.

On the other hand, U.S stocks were set to begin at 0.3 – 0.5 percent higher prices. These shares are at status quo since they hit highest in the middles of May.

World’s second largest economy and its representative, Shanghai, caught the global focus on itself again considering financial risks. Last week we saw something of a street fight in a sell – off war, and stocks are still 50 percent higher this year.

Mondays big leap, according to the analysts and traders is a result of bad surveys, and that all of them had one thing in common – bad outlook of the economy. They believe that this is evidence that markets around the world are driven by speculators and false reports, instead of real economic data.

Wang Yu, analyst at Pacific Securities in Beijing, stated that the pattern in a bull market is always the same. A plunge comes in, followed by pilling the money, and as a result the market is pushed higher. “ For many of our clients, last week’s happenings on the market represent a big risk reduction, and that, in the end, will create new buying possibilities “, he said.

We were also witnesses of the biggest one – day rise since December 2012 today. CSI300 index of the biggest listed companies in Shenzhen and Shanghai made a jump of 4.9 percent. FTSE Euro first index of 300 leading companies from Europe went up 0.6 percent, making a profit in all major markets. Asia – Pacific’s MSCI index outside Japan, went just a little bit lower, since they already sank to its lowest enter day level since the seventh of April.

The talks between Athens and its creditors, which were not so good in the last period, didn’t cause much harm to the euro until Monday. It went down 0.5 percent. The sinking could have been bigger, but speculation came that the negotiations are better and some statement is on its way. But, after all officials issued a press release that no prospect was in hand.

The U.S dollar gained even more strength in the last ten days, causing euro to fall deeper, but it did not change the ratio against the yen.
Market concerns remain strong, after Greece missed the deadline on Sunday to reach agreement. The deadline from IMF is the fifth of June, so all eyes are looking in that direction.

Monday, 1 June 2015 0 comment

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