Thursday, 14 February 2019

Forex trading for beginners | Simple And Cool Guide For beginners 2019

Forex trading for beginners

Trading currency in foreign exchange market (Forex currency) is quite easy today with three types of accounts designed for retail investors: standard lot, mini lot and micro lot. Start with the initial micro account and up to $ 50
Forex trading for beginners
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Before you start jumping in, you should be familiar with the Forex market market and terminology, and if you are already trading stock online, then it should be easy to start it.

Below is a list of words that you should learn.


PIP: The smallest value change that can make a given exchange rate. Since most major currency pairs are worth four decimal places, the smallest change is the last decimal point. A general exception is for the Japanese Yen (JPY) pair, which has been cited at the second decimal point.

Base Currency: First currency quoted in currency pair on foreign exchange It is also commonly considered as a home currency or accounting currency.

CROSS CURRENCY PAIR: A pair of currency trading currencies in which the US dollar is not included. For the first time in the US dollar, a foreign exchange is traded for the other without exchange of currencies.

Currency Fund: Quotation and pricing structure of currencies traded in foreign currency market: The value of one currency is determined by the comparison of the second currency. The first currency of the currency pair is called "base currency", and the second currency is called "quote currency". The currency pair shows how much of the bid currency is needed to buy a unit of base currency.

QUOTE CURRENCY: Second currency quoted in a currency pair in the forex. In a direct quote, quote currency is foreign exchange. In indirect quotation, quote currency is the domestic currency. It is also known as "secondary currency" or "counter currency".

Now that we have reviewed the basic terminology, let us focus on some differences between trading shares and currencies. In currency trading, you always compare one currency with another, so foreign currency is always cited in pairs. Sometimes the authors of currency research will mention only a half portion of the currency pair. For example, if an article is referring to Euro (EUR) trade on 1.3332 then it is believed that the other currency is US Dollar (USD).

When looking at the quotation screen for the first time, it may seem confusing at first, however, it is actually quite straightforward. Below is an example of a EUR / USD quote.



Quote example illustrates how much a Euro is worth in the US dollar). The first currency in the currency pair is "base currency" and the second currency is "counter currency" or secondary currency.

When buying or selling a currency pair, action is being taken on the base currency.

For example, traders can sell EUR / USD trading on the Euro. Now, when selling EUR / USD, the trader is not only selling the euro but also buying the US Dollar at the same time. Thus pair business.

Let's say you sell EUR / USD at 1.4022. If EUR / USD falls, then this means that the euro is weakening and the US dollar is getting stronger. You may have also noticed that there are four places on the right side of the decimal point of the house. Currencies are quoted in pips. A pipe is the unit in which you calculate profit or loss. Most currency pairs, except Japanese yen pairs, are quoted for four decimal places. After the decimal point (100th of a percent), this fourth place is usually seen as the merchants to calculate "pips".

Every point in the quotation moves is 1 pip of movement. For example, if GBP / USD increases from 1.5022 to 1.5027, then GBP / USD 5 pips has increased.

Depending on the size (standard, mini, micro), the monetary value of a pipe can now vary according to the size of your business and the currency you trade.

The most common lot size is trading in the increase of 10,000 (mini). For EUR / USD, the size of 10,000 is $ 1.00 per lot. If you were trading 3 lots or 30,000, each pipe is worth $ 3 in profit or loss. A full size lot, or standard lot, is 100,000 where each pipe costs $ 10, and a micro lot size is 1,000, each pipe is worth $ 0.10.

Some currency pairs will have different pipe values. Be sure to check with your broker.

One good thing about trading currencies is that there is no commission. Looking at the quotation image above, note the small number of pips between the two quoted currencies: The difference in prices is 2.5.

It is known as propagation. The spread is how the broker makes its money and stock trading does the same thing as speaking / asking. Not all spreads have been created equal. Broadcasting differs between brokers and sometimes the time of day can be a cause of light and the spread of growth can be spread among some brokers.

Thoughts and opinions expressed here are the views and opinions of the author and it is not necessary that they are Nasdaq, Inc.

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