Forex or FX trading is referred to as the financial market where currencies are traded. But it goes beyond currency – you can also trade in commodities, stock market indexes, and stocks! This is the single largest global market where the trading volume exceeds $5 trillion. So, learning how to trade in Forex can be advantageous to both small and large investors.
Learn How To Trade In Forex Using These 6 Tips!
Before you learn how to trade in Forex for the first time, you’ll need to follow these tips.
1. Select A Currency Pair
We’ve gone to the heart of the source and according to the official forex website, you need to always trade currencies in a pair. Why is that you may ask? Well, as we exchange the value of Dollars or Euros for another currency, we will literally be buying one form of currency while selling the other simultaneously. So, we need to make the right pair.
FUN FACT: The most commonly offered pairs of major currencies like EUR/USD (Euro/ U.S. Dollar) are the first and most obvious choice for new traders. But did you know? You can go for any currency pair that Forex offers as long as there is the fund in your account to support the exchange.
2. Explore The Global Financial Market
Speaking of going for any currency pair and thinking outside the common currencies, know that the global financial market is online for this reason.
All transactions in the Forex market take place over the internet. The global financial market does not have a specific center, as it is carried out through the trade networks of countries all over the world. It allows you to trade easily, regardless of where you are in the world.
That being said, don’t forget to also research the global financial markets using current and historical charts, and regular information sites which track the news for economic announcements. Study indicators by doing some technical and fundamental analysis and one super easy way to do that is to solely focus on a particular currency pair. By zoning in onto one pair, you’ll find valuable resources that stand out from the rest.
3. Check Out Different Trading and Investment Platforms
Forex trading is carried out through Forex trading platforms such as MetaTrader 4 or MetaTrader 5. You can use these investment platforms from your computer, tablet or smartphone, where you can see all market data, open and close positions, and access analysis. Thanks to the InvestOR investment application, in addition to carrying out your transactions, you can easily manage all your investments from a single screen and access market analysis.
4. How Does 5 Days 24 Hour Trading Work?
Forex trading is a market that is active 24 hours a day on weekdays. Even if the markets in the country you are in are closing, you can trade without interruption as it will be opened in another country. What you need is the internet, a trading platform where you can enter Forex and a brokerage firm approved by the CMB. It starts with the New Zealand market opening and ends with the closing of the US market.
5. Profit from Price Changes – The Main Goal
Taking advantage of price differences in investment instruments is the basis of learning how to trade in Forex.
In order to win in this market, where you will gain profit by performing advantageous transactions, you must first develop your dominance over the market. It is true that thanks to its leveraged structure, it provides high profit rates with a small investment, but instead of instant decisions and emotional approaches, expert analysis and the power of experience should be trusted. Those who aim to gain in a controlled and gradual way are among the winners of Forex.
6. Trading With Different Investment Instruments
Many products are traded in Forex. Currency pairs, commodities such as gold, silver, oil, wheat, stock market index, stocks, etc. But unlike traditional trading, you do not physically own a product in Forex trading. Since all transactions take place over the internet, this is a non-physical environment.
Undoubtedly the American Dollar is the most traded currency in the Forex market.
The American Dollar provides the opportunity to invest in the currencies of all countries of the world. Although the EUR/USD parity constitutes most of the transactions, commodity trading, such as gold and oil trading, is also among the popular investments. Thanks to the bidirectional trading feature, you can make profits even when the price curve is down.