Forum » Off-Topic » Off-Topic Discussions » Forex trading for beginners

Forex trading for beginners

  • Forex trading for beginners

    What is forex trading?
    Forex trading is the process of speculating on currency price movements, with the aim of making a profit. Many currency conversions on the forex market are for practical use, and not for creating profit. However, traders can speculate on forex market price movements, with the aim of capitalising on correctly forecasting these movements.To get more news about learn how to trade forex, you can visit wikifx.com official website.
    Trading forex step-by-step guide
    Open a spread betting or CFD trading account. You can open a live or demo account to trade on price movements of forex pairs.
    Start researching to find the FX pair you want to trade. Use our news and analysis section to keep up-to-date with market news which may impact FX, and our market calendar to keep updated with market-moving events.
    Based on your research, decide if you want to buy or sell. Is the research you’ve conducted indicating the base currency (the first-named currency in the pair) is likely to weaken or strengthen? Go long and ‘buy’ if you believe it will strengthen, or go short and ‘sell’ if you think it will weaken.
    Follow your strategy. Before placing a trade, ensure you have followed your strategy which should include risk management. Also, see our tips on building a trading plan.
    Place your forex trade. As per your strategy, place your forex trade with defined entry and exit points. Don’t forget to use risk management conditions, such as a take-profit or stop-loss order.
    Close your trade and reflect. By following your trading plan, exit the market at your forecasted limits. Think about how you performed, so that you can improve after each trade you make.
    Forex trading examples
    When placing trades on the forex market, you are trading the strength of one currency against another. For example, if you go long and ‘buy’ USD/GBP, you are speculating that the US dollar price will increase, relative to the price of the pound. Alternatively, if you go short and ‘sell’ EUR/AUD, you are speculating that the euro will weaken in comparison to the Australian dollar.

    Example trades are a useful way to learn the process of forex trading. Our forex trading examples show the opening and closing of a trade position, and how to calculate the accompanied profit associated with the trade.

    Forex basics
    As a forex trading beginner, it’s important to understand the basics of the forex market. These fundamentals will help your understanding of the key aspects of the foreign exchange market and ultimately help you to make informed decisions when currency trading​.

    The foreign exchange market
    Forex, foreign exchange, or simply FX, is the marketplace where companies, banks, individuals and governments exchange currencies. It’s the most actively traded market in the world, with over $5 trillion traded on average per day. When trading currencies on the foreign exchange market, currency pairs​ are often split into major, minor and exotic (or emerging) currency pairs.

    The US dollar is considered the most popular currency in the world, and constitutes around 60% of all central bank foreign exchange reserves. So it’s no surprise the US dollar is evident in many of the ‘majors’ (major currency pairs), which make up 75% of all forex market trades. As a beginner, it may be wise to trade the majors, as they’re known to be the most liquid and least volatile of the currency pairs.

    We offer trading on over 300 FX pairs through both spot prices and forward contracts​.

    Forex leverage
    When you trade forex with a spread betting or CFD trading account, you trade with leverage. This means you only need to put up a portion of the full trade value to open a position, known as trading on margin​. However, your exposure in the market will be based on the position's full trade value. It’s important to understand that both profits and losses are magnified when trading on leverage. Find out more about leverage in forex​ here.
    Forex holding costs
    When trading forex with us, a holding cost is applied which is either credited or debited to your account depending on the direction you’re trading, and the applicable holding rate. Holding costs are evident when you hold a position open past the end of each trading day (5pm EST). Generally, when you hold a buy position, a holding cost is credited to your account. If you hold a sell position, the holding cost is debited from your account. Find out more about CFD holding costs​.

      September 7, 2022 9:31 PM MDT
    0