Most people are looking for where to invest and still haven’t understand that Forex trading doesn’t belong to big businesses and banks, Forex trading is now for the public and thanks to internet services that is common now. No matter how small your income is, you can actually invest in Forex trading. However, this article is to completely guild you to understand Forex trading and how to succeed in it. This is to motivate you to invest your income wisely and for you to stop searching for how to invest your money since there is a type of investment you can actually take advantage of known as Forex trading.
What is Forex trading by the way?
Forex trading (FX) is defined as the online/internet currency exchange trade or the act of simultaneously buying and selling currencies of different countries online using internet trading platforms. Trading forex simply means buying one currency while simultaneously selling another currency.
How does Forex trading work?
The most important thing to know about Forex trading is that it is a trade between two currencies and that there is what is known as base currency and counter currency. For a better understanding, let’s use EUR/USD as an example of trading pair. In the above trading pair, the currency on the left is the base currency and the right one is the counter currency.
This is how a trading pair looks like:
EUR/USD = 1.17000
The numbers to the right of the equal sign tell you the quantity of counter currency, in this illustration Dollars, needed to buy one unit of the base currency, here the Euro. $1.17000 dollars buys 1 Euro. However, forex trades are always executed with a pair of currencies, when you are buying one currency (EUR), you are selling the other currency (USD).and if you’re selling EUR, you are buying USD. So, if you believe the value of the base currency will rise against the counter currency, you’ll buy the base currency and if you believe the base currency will fall in value against the counter currency, you’ll sell the base currency.
Besides, another important thing to know about Forex trade is the significance of the three trailing zeros as used in the example above. Mostly, the gains and losses per unit value are very small so if you bought any quantity of Euros at the 1.17000, you might close out the position when the value rose to 1.17005. However, a common trade size, in fact, one often referred to as a “standard trade,” is 100,000 units. So if the value of the Euro rose to 1.17112, your profit from a single trade unit would be $112.
How to start Forex trading
You need to research careful about a particular Forex Broker before you open an account with them using the big and established Forex trading platforms, since there are a lot of fake Forex Brokers.
3 requirements for starting a Forex trade
- Open Account with Forex Brokers: Go to the website of your desired Forex Brokers and open account. Forex Broker or the Forex trading platforms is the medium through which currency is traded online.
- Fund Your Forex Account: To start live Forex trade, you must fund your account. Funding can be done through direct deposit or by using your credit/debit cards.
- Have A Domiciliary Account: This is very important for effective transaction and to enable you make a withdrawal of your profit when there is any.
The profit you make depends on your trading skills. People are making profit in Forex trading and will continue to make profit as long as currency remains in use. In fact, nothing has changed and will probably change forever.
10 major skills you need to reach your goals in the Forex market:
1. You need focus to concentrate.
2. You need confidence to enable beliefs in yourself.
3. Discipline is your key to be calm.
4. Dedication is a skill you need too to be the best Forex trader.
5. You need to be flexible to be able to trade during changing times successfully.
6. You need the ability to bear your loss at times.
7. You need to be organized to enable you forge and reinforce positive trading habits.
8. Patience is important to help you wait for the best time to trade.
9. Self control is a necessity in order not to over trade
10. You really need logic to be able to look at the market from an objective and straight forward perspective.