Trading on Forex. How to start?
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Forex is an international currency exchange on which there is a purchase and sale of currencies. One of its main advantages is that trade takes place around the clock, and currencies are highly liquid. The huge momentum of this market enables the trader to constantly find both buyers and sellers. And the rapid development of the Internet has made Forex trading real for anyone.
The principle of Forex operation is based on fluctuations in the rates of various world currencies. The course of each of them either rises or falls in relation to the rest. To make a profit, a trader makes a choice of a currency pair, buys the necessary number of monetary units, and at the moment when the rate of the chosen currency rises in relation to another currency of the pair, sells it. Or, conversely, the trader sells a certain amount of one currency, and at the time of depreciation, buys it.
What do you need to get started?
To begin work, as well as to continue it, the trader needs the services of a broker. It performs several important functions:
• registers the trader at the auction and accompanies him legally;
• provides the trader with a trading platform, through which the trader takes part in Forex trading;
• gives the trader the opportunity to trade in amounts greater than the size of the minimum deposit made by him, giving him a leverage;
• receives orders from the trader to conclude transactions and implements them.
For intermediary services at the auction, the broker receives a reward.
Choosing a broker is one of the most important stages for a trader to enter Forex. A good broker has such qualities as:
• good faith;
• fair settlement;
• ability to create comfortable conditions for the trader.
In order not to make a mistake at the time of choosing an intermediary, you need:
• pay attention to the life of a brokerage company - the more experienced it is, the better;
• ensure that the company is controlled by a reputable financial regulator;
• pay attention to the place of registration of the broker - it must correspond to the area of activity of the organization controlling it;
• study the feedback of real customers of the company regarding the quality of service and the completeness of company payments.
Account Type Selection
Most often, the broker offers a choice of several different trading accounts. In addition, when transferring a trading platform to a trader, a demo account is offered that allows you to master the software.
In a general sense, all types of trading accounts can be divided as follows:
• cent - the smallest of trading accounts recommended for trading for real money for the first samples after a demo account, this account implies the main trading unit cent;
• mini - deposit from 100 to 1000 dollars;
• professional - a deposit of more than $ 1,000, often higher.
Training and knowledge
Before you make your first Forex transaction, you should take care of obtaining knowledge that allows you to freely operate with the concepts involved in the trading process and make the right decisions. Most brokerage companies, in one form or another, conduct training for beginners. However, additional knowledge will not hurt.
To obtain basic knowledge, you can use:
• video courses
• educational literature;
• materials on specialized resources on the Internet;
• lecture courses;
To increase the level of traders are provided:
• online video workshops.
In addition to basic knowledge, a trader needs analytic skills. It is the ability to predict rate fluctuations that determines the profitability of the trader at the auction.
According to one of the most common analytical approaches, the main factor affecting exchange rates is the ongoing economic processes in the world, reflecting the alignment of forces in the world economic arena. The ongoing processes are reflected in the form of a fall or growth of quotations of a particular currency.
A trend (ongoing process, trend), as a rule, has a certain inertia, which can be used to make a profit. Every tendency, sooner or later ends or is reversed. Then, accordingly, the rate growth stops and, in certain cases, it can be replaced by a drop.
To identify trends and their development, many financial, economic, political and other factors should be analyzed. In addition, for medium- and long-term forecasts, fundamental analysis is applied.