Forex Trading Guide For Beginners

kavi119

26-02-2021 11:05

What is forex trading?

You can define the foreign exchange market or forex as a platform that contains numerous sellers and buyers who agree to exchange one currency with the other at an acknowledged price. It is a medium through which central banks, firms and individuals convert the currency of one country into another. The best example describing the forex transaction is when you travel abroad and exchange currencies to make further payments in the respected country.

While much of foreign exchange is made to fulfil some practical purposes, most conversions are done to harvest profit from financial market moves. The volume of currency converted daily can significantly surge in its value and make this highly volatile. This volatility is the major factor that makes this foreign exchange market attractive for numerous retail traders luring. Moreover, it also paves the way for making a massive profit but, at the same time, also exposes forex traders to financial risk.

How does currency trading work?
Unlike commodities and the stock market, forex trading is done OTC (over-the-counter) market directly between two participants. The entire market is run by two major entities: Spreads calculated across four primary forex trading hubs in different time zones and an international network of banks. The major time zones are Sydney, London, Tokyo and New York. As there are different time zones and locations, you can trade forex twenty-four hours a day.
What Is Trend Analysis?

Trend analysis is a trading strategy that tries to anticipate the future currency price movement depending on the recently observed data related to the trend. It also surrounds the idea that what took place in the past provides a clear idea about what will happen in the future. There are three major kinds of trends: long-term, short-term and intermediate.

Introduction to Forex Elliott Wave Analysis

EV is an acronym for Elliott Wave. It is one of the famous indicators which holds a special position in forex trading analysis because of its several vital characteristics.

Here are several ways which depict how professional approaches to Elliott waves:

Firstly, they select the specific way of producing the Elliott Wave count.
Then they wait until this Elliott wave number becomes 5.
Further, they confirm this trend from several indicators.
After this, they finalise the stop-loss point.
Then they enter the forex market and place stop-loss orders.
Also, they consider optimum gains and stops.
Finally, in the case of losses, they make a trade exit plan.

What if forex risk?

Foreign exchange market risk results from the losses incurred in an international financial transaction because of the fluctuations in the currency price. It is also referred to as currency risk, exchange rate risk and FX risk. It reflects the chances that a currency investment’s value may decline because of variation in the given currency’s aggregated value. Traders may also face jurisdiction risk in the form of forex market risk. Some of the forex risks include:

Risk due to high leverage
Risk due to sudden price shifts
Liquidity risk
Credit risk
Country risk
Interest rates risk
Exchange rate risk
Risk of ruin
Transactional risk

Ten Tips for Forex Risk Management

Here are the top ten methods through which you can mitigate forex risk. These methods are known as forex risk management strategies. They are the same for both professional and novice traders.

Build a strong trading foundation and knowledge before getting started
Read about all risks involved in a forex trade.
Try to employ the stop-loss function.
Use a take profit function to safeguard your profits.
Never risk more than what you can not afford.
Always trade on low leverage.
Make a plan before starting.
Never bring your emotions while trading.
Diversify your trading portfolio.
Keep realistic expectations.
Keep a close check on interest rates.
How to choose the best forex broker?

The financial service provider is an essential entity in trading. It not only helps you in raising trading standards but also assists in money management and risk management. There are many trading firms in the financial market, but choosing the authentic one is a typical job. These fake firms try to lure traders through their misleading website. Hence, don’t make any decision by reading the wrong theory or biased review. Here we have covered some of the top forex brokers for trading.

HFTrading

It is one of the top brokerage firms which was established in the year 2019. The broker allows traders to speculate on a wide variety of assets, including forex, stocks, cryptocurrencies and several others. You can start with the demo trading account offered by the broker. The website of HFTrading is simple and contains each info you require to know before getting started, such as regulation, trading platform, leverage, minimum deposit and contact.

Moreover, the firm is authentic as two central bodies regulate it: the Financial Markets Authority and the ASIC (Australian Securities and Investments Commission). Thus, it is a safe venture to invest your capital. The platforms also keep you updated about financial news, market data and financial market events.

Global TradeATF

Is Global TradeATF a scam? Traders usually ask this question. But, it is entirely a safe brokerage firm to spend your capital. The broker is regulated by the famous financial authority, the Cyprus Securities and Exchange Commission. For utmost trading experience, Global TradeATF offers advanced trading platforms such as MetaTrader 4 and web traders. The instruments available include forex, stocks, commodities, cryptocurrencies, indices and several others.

The broker’s educational hub contains interviews of various successful traders along with courses, tutorials, videos, etc. The latest market news and market price shifts add another feature to its features. Moreover, have distinct teams for different areas such as customer support teams etc.

The Bottom Line
The Forex trading guide covers each critical concept you require to know. Trading in the forex market.Read More........

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