You must have a good knowledge of technical and fundamental analysis
Are you disciplined?
2 min read
What is needed to trade on Forex? To come to the answer we must clear several things.
CONCEPT OF FOREX TRADING
Forex represents the foreign exchange/currency market. The word forex itself is made of two English words: foreign and exchange and signifies the purchase of currencies from different countries.
Unlike other stock exchanges, Forex does not have its physical seat in a city. It exists in an electronic network consisting of large financial institutions.
Today, Forex is the largest financial market, which has a daily turnover of around $ 5.5 trillion a day.
You can complete this whole process online
The term currency market means the sale of one currency with the simultaneous purchase of the other. As currency pairs are traded, in order to profit from the shift in the exchange rate, you need to buy the currency that you think will strengthen and sell the other.
There is no need to wait for a growing market to profit. At any moment, one currency will strengthen in relation to the other.
What is needed to trade on Forex, the essential part
Since nothing concrete and tangible anything is bought and sold, this type of trade can be a little confusing. You should think that you are buying a part of the value of a country. If you buy a Japanese yen, you are buying a part of the Japanese economy that is in direct correlation with what the market thinks about the current and future health of the Japanese economy. Generally, the established exchange rate of the two currencies is a ratio that reflects the state of one economy in relation to the state of another economy (the state, the currency).
Forex is opened 24 hours a day, except on weekends, so that Sunday trading starts on Sunday from 21:15 CET and runs until Friday at 23:00 CET. During the day there are several time intervals that coincide with the working hours of the world’s largest stock markets.
Who trades on the Forex market?
Forex traders can be classified into two groups, hedgers and speculators.
Hedgers: governments, companies (importers and exporters) and some investors who are exposed to exchange rate changes.
Speculators: This group, which includes banks, funds, corporations, and individuals, creates artificial pressure on the course in order to profit from variations or price movements.
Represents a change in the ratio of the currency by one decimal. It is the smallest unit change course. Pip is the last decimal in a currency relationship
Stop and Limit – Orders
Often the trader wants to limit the loss in the position he has opened (in that case he sets the “stop” order) or wants to take profit at a certain level, which is acceptable to him (in this case he sets a “limit” order).
Long – Tremin used for the purchase order,
Short – tension used for a sales order,
Bid – bid price,
Ask – the price that is claimed,
Buy – Shopping,
Sell – sale,
Spread – the difference between the sale and purchase price,
Chart – graph
Time frame – time period,
Candlestick – Candlesticks show that emotion by visually representing the size of price moves with different colors.
What is needed to trade on Forex?
Before you start trading the currency, you need to open an account with a Forex broker. Our recommendation is that before you decide on trading on Forex, open a demo account with one of the brokers so that through the use of the platform, you will continue to monitor market activities and learn more.
Conditions for Success
You must have a good knowledge of technical and fundamental analysis, as well as managing your account. You should also know the psychological aspect of the trade and that you are disciplined. To be able to trade Forex successfully, there is a whole world of education, really extensive analysis and countless hours of tracking a very large number of relevant and potentially relevant information, all without any guarantee that the right decision will be made.
So once again, the investment rule has been confirmed: high risk must be taken to achieve high income.
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