Forex market Like all other markets, currencies are traded here instead of just food and goods. Anyone can trade forex, but those who trade are called brokers. Here, the various currency is bought and sold. Such as the euro and us dollar. If you want to sell the euro and buy the dollar, then you will open the EURO / USD trade and press buy. If you want to buy a euro from the dollar, you must follow the same option.
People usually buy a currency pair at the lower price on the forex and sell the currency pair at a higher rate.
The difference between the buy and sell price here is the difference. Suppose, you have 200 dollars in your trading account. The exchange rate is 1.50. Which means, from 1 euro you get 1.50 dollars. The exchange rate is, for example, the price tag that is at the grocery store. The difference here is that the price tag here is always changing.
Next, you need to create a forecast. For example, what you think today euro will go above the dollar. Then you buy 100 euro with 120 dollars and then you wait, exchange rate changes.
Suppose the dollar rate went from 1.50 to 1.85, then this is a profitable situation for you, now you can close your trade.
If you think your money is not bothering, then here is the good news, there are special tools called leverage. Leverage is funded you borrow from your broker to multiply your deposit.
For example, if you use the leverage of 1:6000 at FBS for a similar trade, you would get $4800 with just one trade. so you invest 200 and trade $600000. It is a very good trade, right?
Just remember, higher profits have more risk, so the risk is an important part of trading. Currency rate depends on supply and demand. The currency rate generally depends on the economic situation of the country. Usually, the currency rate depends on the political, economic, social conditions of the country.
Two types of tools available, that indicates the best moments of buy or sell
This is to follow the economic news of different countries.
As you have seen, the unemployment rate in Europe has decreased, which means that the euro rate will increase. Sell USD/euro and just wait.
You can use the currency rate chart to create a forecast. The pattern of the graph will tell you what to do. You can review the most popular pattern, head and shoulders pattern.
Technical analysis is a framework, Here forex traders study price movements. Through this theory, one can see the movement of the historical price, know the current trading status and know the price movement. According to the technical analysis, all the current pieces of information about the market are exposed through price.
If all the information’s of the market are exposed through price, then the technical analysis is really important for trading. In this era of trading, when one speaks of technical analysis, the first thing that comes to mind is a chart. Technical analysts use the chart because historical data is available through the chart. Through technical analysis, you will get the opportunity of good trading.
List of the best Forex Brokers:
- Vantage fx
- Admiral markets
You don’t need a degree to get great at finance. Only with a lot of analysis and practice you become a better trader and earn a living at home.