INTRODUCTION TO FOREX TRADING
Forex Beginners Course
Welcome to our Forex trading course, for those looking to learn to trade Forex online. If you’re completely new to the world of online Forex trading and want to understand how to set up an account then this course is for you. Online forex trading is 100% real and very profitable but not suitable for everyone, you should consider your financial objective before trading forex. It involves profit and loses just like every other business.
Becoming a successful Forex trader is an ongoing process. It has a beginning but no end. Your journey to success starts with the Online Forex Trading course; you must however proceed further by giving it all it takes to make a huge success of this very lucrative business.
The reality of forex trading is that only 10% succeed. 90% fail woefully and end up paying the 10% who succeed. What makes the differrence? We will show you step-by-step, "holding your hands" as you take your first steps in the highly profitable.
In this step-by-step course, you’ll learn about the Forex markets, terminology and how to prepare for your first trade.
THIS BUSSINESS IS NOT FOR YOU IF YOU ARE….
This is not a get rich quick syndrome as many thought.
Who can trade Forex and stocks?
· Bankers, Treasurers
· Finance Managers/Directors
· Industrialists, Investors
· Corporate Executives
· Decision Makers, Politicians
Forex trading refers to the exchange of one currency with another in at least two opposing sequences, in order to profit from the change in the rate of exchange between both currencies.
When we say opposing sequences, it means that you must first be in possession of a currency of trade, use it to buy a certain amount of another currency, wait for the second currency to gain in value over the first currency held, then re-exchange the second currency for the first one, getting more of the first currency in the process.
In online forex trading, this process is performed using certain technology such as trading platforms, is highly automated and occurs very fast. The process is a mirror of what goes on in the offline currency exchange market. It is also done on a much larger scale, as this process includes all players in this market on a global scale.
Life is a journey and so are the many aspects of our lives including careers. Therefore, learning to trade Forex is a journey on itself that requires traders to take specific steps before finally launching their activity online. You cannot just wake and decide that today you are going to start trading online.
In order to success in online trading, traders must have a plan which involves establishing an entry strategy, a trading strategy, withdrawal/reinvestment strategy, huge loss impact recovery strategy and most importantly, an exit strategy.
As such, this implies the importance of learning to trade because traders must learn how to derive the strategies that suit them both personally and financially.
So what does a beginner who may have some faint idea as to how currencies are exchanged with a local Bureau de Change operator, have to know about the way the online spot forex market operates?
Fixed vs Floating Currencies
A currency is said to “float” when its value is determined by forces of demand and supply for it. Change in value of a currency is what makes forex trading, and is a continuous process which occurs minute by minute, and second by second when the market is very active. You cannot make any money if the value of a currency is static, such as is the case with fixed currencies. Some governments either fix a set value for their currencies, or restrict its movements to a tight band.
Various factors cause traders to have demand for a currency; many of these factors are listed in the forex news calendar and form the basis of news trades. The relationship between these factors and the change in value of currencies is complex and demands careful study from the beginner trader. Indeed, a beginner in forex should ideally not trade the news until these complex relationships are understood and mastered.
Currency Pricing and Pairing
Currencies are traded in pairs and have two sets of prices. There is a “bid price”, and the “ask price”. So a typical quote for the Euro against the US Dollar will be displayed as follows:
EUR/USD = 1.0345/1.0348
In this example, the currency pair is EUR/USD, the bid price is 1.0345 and the ask price is the 1.0348.
Access to the forex market is obtained through a forex trading account. Apart from a brokerage account, there are other requirements the trader must fulfill:
The Main Advantages of Forex
There are many benefits and advantages of trading Forex. Here are just a few general reasons
Spot currency trading eliminates the middlemen and allows you to trade directly with the market responsible for the pricing on a particular currency pair. All trading orders are sent directly to the liquidity providers without any intermediaries to ensure minimum execution time.
No fixed lot size
In spot Forex, you determine your own lot, or position size. This allows traders to participate with the minimum trade size of 0.01 lots (1 000) with deposits as small as 100 EUR / USD / CHF / GBP.
Lower Transaction Costs
The retail transaction cost (the bid/ask spread) is typically less than 0.1% under normal market conditions. At larger dealers, the spread could be as low as 0.07%.
No one can corner the market
The foreign exchange market is so huge and has so many participants that no single entity can control the market price for an extended period of time.
Leverage – Trading on Margin
In Forex trading, a small deposit can control a much larger total contract value. Leverage gives the trader the ability to make nice profits while at the same time keeping the risk capital to a minimum.
For example, if you trade with 1:100 leverage it means that a 100 Dollars margin deposit would enable a trader to buy or sell 10,000 Dollars worth of currencies. Similarly, with 500 Dollars, one could trade with 50,000 Dollars and so on. However, leverage can also be a double-edged sword as without proper risk management, this high degree of leverage can lead to large losses as well as gains.
Due to the massive size of Forex market, it is also extremely liquid. This means that under normal market conditions, with a click of a mouse you can instantaneously buy and sell at will as there will usually be someone in the market willing to take the other side of your trade and thus you are never stuck in a trade. You can even set your online trading platform to automatically close your position once your desired profit level (a limit order) has been reached, and/or close a trade if a trade is going against you (a stop loss order).
Low Barriers to Entry
You would think that getting started as a currency trader would cost a ton of money. The fact is, when compared to trading stocks, options or futures, it doesn't. In Fx offers Micro trading account with a minimum account deposit of 100 Dollars.
FX is not recommending that you should open an account with the bare minimum, but it does make Forex trading much more accessible to an individual who does not have a lot of start-up trading capital.
Free Demo Account, Forex Education Material and Analytics
FX also offers a demo account to allow you to practice trading and build your skills. You will also have access to loads of free Forex education material including video tutorials, daily market analysis and trading platform guides. If you are new to Forex, we recommend that you start by opening a demo account as it is a very valuable resource for those who are financially hampered and would like to sharpen their trading skills with virtual money before opening a live trading account and risking real money.
The Forex market is a continuous 24-hour market. Some Forex Brokers open from Sunday 9:30pm local time until Friday 10:am Local Time, with customer service available 24/5. With the ability to trade during the US, Asian and European market hours, you can customize your own trading schedule.
Instant Execution of Market Orders
Your trades are instantly executed under normal market conditions. Under these conditions, usually the price shown when you execute your market order is the price you get. You're able to execute directly off real-time streaming prices.
Keep in mind that some brokers guarantee stop, limit, and entry orders under normal market conditions.
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