Forex trading, or currency trading or FX trading, involves currency trading and speculation on currency price fluctuations in a period of time. Traders sell or buy currency against others. As a merchant, you will benefit from exchange rate changes for the pair. You speculate whether the monetary value, e.g. Euro, will rise or depreciate against one other currency such as US Dollar. Compared to the financial markets, the forex market has no exchange center or physical location. It operates 24 hours a day through a network of global banks, businesses and individual traders. This means that the exchange rate of the currency has risen and rises against each other all the time, giving a broad trading opportunity to profit.
The forex market has the world’s largest trading volume, with currency trading worth over $ 5 trillion USD daily. For this reason, the currency market is very dynamic and very liquid. Because of this liquidity, the exchange rate cards can quickly change based on market news, political situations and major economic events. As the currency market reflects political and economic events tied to a particular region, forex traders can take advantage of market influences by trading.
Forex positions are always expressed in the form of a currency pair, GBP / USD (also called cable) as an example. To make a profit, you need to see the exchange rate fluctuations. The first currency is called the base currency / base. Forex trading speculates whether it will go up or down based on quotes / quotes. When you open a trading position, you are speculating about the direction of market movement. Whether you choose a long-term (long-term) or sell (short-term) position, depending on the direction of the monetary value movement. The price movements in the forex market are influenced by the increase or depreciation of the monetary value.
Start trading forex in 5 steps
Choose your currency pair
Choose which currency pair you want to trade is the first decision you need to make as a trader. At ThinkMarkets, we offer a wide selection of major, minor and exotic pairs for your selection. New traders often start with the usual currency before starting to look for opportunities with the currency they have not yet or less exposed.
Determine whether you want to sell or buy
After selecting your market, you need to determine the current trading price and direction of market movement according to your estimates. Forex pair is called a currency (base currency) and another as (currency of pronunciation), therefore:
If you feel that the base currency will rise against the currency of the pronunciation or the currency of the pronunciation will shrink over the base currency, you will buy the pair.
If you feel that the base currency will shrink over the currency of the pronunciation or the currency of the pronunciation will rise above the base currency you sell.
Each pair has two prices. The first price is the bid or sell price, while the second price is the demand price or the purchase price. The difference between the two prices is the difference or spread that is your trading cost.Additional instructions An order is an order to automatically trade in the future when the exchange rate corresponds to the pre-determined level. Stop-loss instructions and restrictive directives are used to ensure that key profit and loss are reduced.
Monitor your trading position In open position, your profit (L & L) fluctuates with every market price movement. That’s an important reason to monitor your M & E in real time. In this way, you can close or increase the trading position as needed.
Close your trading position Trading close is equal to opening positions. If you start with 5 units, you need to sell the same number of units when closing. When you close the trading, your profit is reflected directly in your trading account immediately.