Trading de Forex ou de opções binárias: 03/21/23

Forex trade 8

FOREX FOR BEGINNERS – WHY TRADE FOREX?

Here you’ll find forex explained in simple terms. If you’re new to forex trading, we’ll take you through the basics of forex pricing and placing your first forex trades.

‘Forex’ is short for foreign exchange, also known as FX or the currency market. It is the world’s largest form of exchange, trading around $4 trillion every day. This exceptional liquidity ensures reliable pricing even at high volumes and enables the tightest possible dealing spreads. When you trade forex your trading costs are comparatively low, and you can easily go long or short of any currency.

Forex explained.

The aim of forex trading is simple. Just like any other form of speculation, you want to buy a currency at one price and sell it at higher price (or sell a currency at one price and buy it at a lower price) in order to make a profit.

Some confusion can arise as the price of one currency is always, of course, determined in another currency. For instance, the price of one British pound could be measured as, say, two US dollars, if the exchange rate between GBP and USD is 2 exactly.

In forex trading terms this value for the British pound would be represented as a price of 2.0000 for the forex pair GBP/USD. Currencies are grouped into pairs to show the exchange rate between the two currencies; in other words, the price of the first currency in the second currency.

Some commonly traded forex pairs (known as ‘major’ pairs) are EUR/USD, USD/JPY and EUR/GBP, but it is also possible to trade many minor currencies (also known as ‘exotics’) such as the Mexican peso (MXN), the Polish zloty (PLN) or the Norwegian krone (NOK). As these currencies are not so frequently traded the market is less liquid and so the trading spread may be wider.

Forex trading spread.

Like any other trading price, the spread for a forex pair consists of a bid price at which you can sell (the lower end of the spread) and an offer price at which you can buy (the higher end of the spread). It is important to note, however, for each forex pair, which way round you are trading.

When buying, the spread always reflects the price for buying the first currency of the forex pair with the second. So an offer price of 1.3000 for EUR/USD means that it will cost you $1.30 to buy €1. You would buy if you think that the price of the euro against the dollar is going to rise, that is, if you think you will later be able to sell your €1 for more than $1.30.

When selling, the spread gives you the price for selling the first currency for the second. So a bid price of 1.3000 for EUR/USD means that you can sell €1 for $1.30. You would sell if you think that the price of the euro is going to fall against the dollar, so you can buy back your €1 for less than the $1.30 you originally paid for it.

Calculating your profit.

Take another example. Suppose the spread for EUR/GBP is 0.8414-0.8415. If you think the price of the euro is going to rise against the pound you would buy euros at the offer price of 0.8415 per euro. Say in this case you buy €10,000 at a cost to you of £8415.

The spread for EUR/GBP rises to 0.8532-0.8533 and you decide to sell your euros back into pounds at the bid price of 0.8532. The €10,000 you previously bought is now therefore sold for £8532. Your profit on this transaction is £8532 minus the original cost of buying the euros (£8415) which is £117. Note that your profit is always determined in the second currency of the forex pair.

Alternatively, suppose in the first instance you think the price of the euro is going to fall, and you decide to sell €10,000 at the original bid price of 0.8414, for £8414.

In this case you are right and the spread for EUR/GBP falls to 0.8312-0.8313. You decide to buy back your €10,000 at the offer price of 0.8313, a cost of £8313. The cost of buying back the euros is £111 less than you originally sold the euros for, so this is your profit on the transaction. Again your profit is determined in the second currency of the forex pair.

Why trade forex?

As forex is traded on exchanges across the globe, from Tokyo to London to New York, you can take a position 24 hours a day throughout the trading week. Currency values are extremely sensitive to macroeconomic forces, so there are always trading opportunities.

Intertrader provides two different vehicles for trading forex: spread betting and CFDs. Both of these products allow you to speculate on the movements of currency markets without making a physical trade, but they operate in slightly different ways.

With spread betting you stake a certain amount (in your account currency) per pip movement in the price of the forex pair. So for instance you might buy (or sell) £10 per pip on USD/JPY, to make £10 for every pip the US dollar rises (or falls) against the Japanese yen. Forex traders have been using spread betting to capitalise on short-term movements for many years now. Find out more about spread betting.

With CFDs you buy or sell contracts representing a given size of trade. So you might decide to buy 1 contract of GBP/USD, which (with Intertrader) represents a trade of £10,000. Your profit or loss is calculated in the second currency, in this case US dollars, and then converted (if necessary) into your account currency. Find out more about CFDs.

Either way you don’t have to provide the full currency value to open your position. Instead you put down a margin deposit, which is a fraction of the full value. And you don’t actually buy or sell any currency: you are opening a speculative position on the change in value of the forex pair. Your profit or loss is realised when you close your position by selling or buying.

You should always keep in mind, however, that while your margin deposit only represents a proportion of the full contract value, this form of leveraged trading can lead to rapid losses and you can lose more than your initial deposit. Please ensure you understand the risks involved.

With the Intertrader custom MT5 web and desktop platforms, or the MT5 mobile apps, you can also trade a huge range of equities, indices, commodities and more on the same account. Trade forex with Intertrader and you’ll get:

Fractional pip pricing: we quote forex to an extra decimal point to help you sharpen your profit Free trading tools including IT-Finance advanced charts and a comprehensive set of analytic tools from Trading Central Tight dealing spreads on all our markets.

Forex trade 7

How to Trade Forex for Beginners: 3 strategies to learn how to trade Forex.

Forex trading for beginners can be difficult. In general, this is due to unrealistic but common expectations among newcomers to this market. Whether we are talking about forex trading for beginners in the UK or share trading for beginners, many of the basic principles overlap. In this article, we're going to focus on Forex trading. However, some of the same strategies, terms and general concepts also apply to share trading.

By the end of it, you'll know all the most essential terms used in Forex trading so you won't be confused at any point while you learn to trade. You'll learn all the basics, including which platform you use, how to execute a trade, 10 Forex trading tips for beginners who want to earn , strategies, and more.

Table of Contents.

Forex Trading Beginners Guide What is Forex Trading for Beginners? How to Forex Trade for Beginners Trading terminology: Forex trading notes for beginners How to Trade Forex for Beginners - Making trades How to read Forex charts for beginners Learn how to trade Forex for beginners - Forex trading systems Forex Trading platforms for beginners Is forex good for beginners? Risks every beginner should be aware of 3 Forex trading strategies for beginners 10 Forex trading tips for beginners who want to earn.

What is Forex Trading for Beginners?

Before we begin this Forex trading for beginners guide and learn how to trade Forex, we will quickly answer the question, 'What is Forex trading?':

The foreign exchange (FX or forex) market is a global marketplace where traders exchange national currencies.

How to Forex Trade for Beginners.

The next question that comes to everyone's mind is: how to learn Forex from scratch? Can I teach myself to trade Forex? Don't worry, this Forex trading for beginners guide is our definitive manual for all aspects of Forex and general trading. By the end, you'll understand the basics of trading Forex and how to begin.

Trading terminology: Forex trading notes for beginners.

Here's where your Forex trading notes for beginners can begin. I'm going to start this trading for beginners guide in the UK by presenting some of the most common terms you'll come across in trading that you'll need to know.

1. Spot Forex.

This form of Forex trading involves buying and selling the real currency. For example, you can buy a certain amount of pound sterling and exchange it for euros, and then once the value of the pound increases, you can exchange your euros for pounds again, receiving more money compared to what you originally spent on the purchase.

2. CFDs.

The term CFD stands for "Contract for Difference". It is a contract used to represent the movement in the prices of financial instruments. In Forex terms, this means that instead of buying and selling large amounts of currency, you can take advantage of price movements without having to own the asset itself. Along with Forex, CFDs are also available in stocks, indices, bonds, commodities, and cryptocurrencies. In all cases, they allow you to trade in the price movements of these instruments without having to buy them.

If you are interested in knowing how CFDs work in greater detail, we recommend the following article that explains CFD trading for beginners: What is CFD Trading?

3. Pip.

A pip is the base unit in the price of the currency pair or 0.0001 of the quoted price, in non-JPY currency pairs. So, when the bid price for the EUR / USD pair goes from 1.16667 to 1.16677, that represents a difference of 1 pip.

4. Spread.

The spread is the difference between the purchase price and the sale price of a currency pair. For the most popular currency pairs, the spread is often low, sometimes even less than a pip! For pairs that don't trade as often, the spread tends to be much higher. Before a Forex trade becomes profitable, the value of the currency pair must exceed the spread.

5. Margin.

Margin is the money that is retained in the trading account when opening a trade. However, because the average "Retail Forex Trader" lacks the necessary margin to trade at a volume high enough to make a good profit, many Forex brokers offer their clients access to leverage.

6. Leverage.

This concept is a must for beginner Forex traders. The leverage is the capital provided by a Forex broker to increase the volume of trades its customers can make.

The face value of a contract or lot equals 100,000 units of the base currency. In the case of EUR/USD, it would be 100,000 euros. If you use a 1:10 leverage rate and have 1,000 euros in your trading account, you can trade a currency pair with a $10,000 position size. If the trade is successful, leverage will maximise your profits by a factor of 10. However, keep in mind that leverage also multiplies your losses to the same degree.

Therefore, leverage should be used with caution, regardless of whether we are talking bout trading for beginners or experts. If your account balance falls below zero euros, you can request the negative balance policy offered by your broker. ESMA regulated brokers offer this protection. Using this protection will mean that your balance cannot move below zero euros, so you will not be indebted to the broker.

7. Bear Market.

This is a term used to describe the stock market when it is moving in a downwards trend. In other words, when the prices of stocks are falling. If a stock price falls deep and fast, it's considered very bearish.

8. Bull Market.

The opposite of a bear market is a bull market. When the stock market is experiencing a period of rising stock prices, we call it a Bear Market. An individual stock, as well as a sector, can also be called bullish or bearish.

9. Beta.

A metric indicating the relationship between a stock's price relative to the whole market's movement. If a stock has a beta measuring 1.5, this means the when the market moves 1 point, this stock moves 1.5 points, and vice versa.

10. Broker.

A broker is a person or company that helps facilitate your buying and selling of an instrument through their platform (in the case of an online broker). They usually charge a commission.

11. Bid.

The bid is the price traders are willing to pay per share. It is set against the ask price, which is the price sellers are willing to sell their shares for. What do we call the difference between the bid and the ask price? The spread.

12. Exchange.

This is a place where trades are made. Two well-known stock exchanges are the NASDAQ and the New York Stock Exchange (NYSE).

13. Close.

This is the at which an exchange closes and trading stops. Regular trading hours for the NASDAQ and the NYSE are from 9 a.m. to 4:30 p.m. Eastern time. After-hours trading continues until 8 p.m.

14. Day Trading.

This when traders buy and sell within a day. Day trading is a common trading strategy. However, if someone day trades, they may also make long term investments as well (a long-term portfolio).

The following two terms only apply to share trading:

15. Dividend.

A proportion of the earnings of a company that is paid out to its shareholders, the people who own their stock. These dividends are paid out either quarterly (four times per year) or annually (once per year). Not every company pays its shareholders dividends. For example, companies that offer penny stocks likely don't pay dividends.

16. Blue Chip Stocks.

These are stocks in big, industry-leading firms. Many traders are attracted to Blue chip stocks because of their reputation for paying stable dividend payments and demonstrating long-term sound fiscal management. Some believe that the expression 'blue-chip' derived from the blue chips used in casinos, which are the highest denomination of chips.

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How to Trade Forex for Beginners - Making trades.

The next section of this Forex trading for beginners outline covers things to consider before making a trade. Before you make a trade, you'll need to decide which kind of trade to make (short or long), how much it will cost you and how big the spread is (difference between ask and bid price). Knowing these factors will help you decide which trade to enter. Below we describe each of these aspects in detail.

Price and Quote.

When you trade Forex, you will see Ask and Bid prices.

Remember, the ask price is the price at which you can buy the currency And the bid price is the price at which you can sell it.

One of the things you should keep in mind when you want to learn Forex from scratch is that you can trade both long and short, but you have to be aware of the risks involved in dealing with a complex product.

Long trade.

Buying a currency with the expectation that its value will increase and make a profit on the difference between the purchase and sale price.

Disclaimer: Charts for financial instruments in this article are for illustrative purposes and does not constitute trading advice or a solicitation to buy or sell any financial instrument provided by Admirals (CFDs, ETFs, Shares). Past performance is not necessarily an indication of future performance.

Short trade.

You sell a currency with the expectation that its value will decrease and you can buy back at a lower value, benefiting from the difference.

The price at which the currency pair trades is based on the current exchange rate of the currencies in the pair, or the amount of the second currency that you would get in exchange for a unit of the first currency (for example, if you could exchange 1 EUR for 1.68 USD, the purchase and sale price your broker gives will be on either side of this number).

If the way brokers make a profit is by collecting the difference between the buy and sell prices of the currency pairs (the spread), the next logical question is: How much can a particular currency be expected to move? This depends on what the liquidity of the currency is like or how much is bought and sold at the same time.

The most liquid currency pairs are those with the highest supply and demand in the Forex market. It is the banks, companies, importers, exporters and traders that generate this supply and demand.

The major currency pairs tend to be the most liquid, with the EUR / USD currency pair moving 90-120 pips on an average day and therefore providing the most opportunities for short-term trading. In contrast, the AUD / NZD pair moves between 50 and 60 pips per day, and the USD / HKD currency pair only moves at an average of 32 pips per day (looking at the value of the currency pairs, most will appear with five decimal points).

The main Forex pairs tend to be the most liquid. However, there are also many opportunities between minor and exotic currencies, especially if you have some specialised knowledge about a certain currency.

How to read Forex charts for beginners.

No Forex trading for beginners article would be complete without discussing charts. When viewing the exchange rate in live Forex charts, there are three different options available to traders using the MetaTrader platform: line charts, bar charts or candlestick charts. When in the MetaTrader platform you can toggle between these different chart types by selecting View -> Toolbars -> Standard option. In the toolbar at the top of your screen, you will now be able to see the box below:

Line charts.

A line chart connects the closing prices of the time frame you are viewing. So, when viewing a daily chart the line connects the closing price of each trading day. This is the most basic type of chart used by traders. It is mainly used to identify bigger picture trends but does not offer much else unlike some of the other chart types.

OHLC bar charts.

An OHLC bar chart shows a bar for each time period the trader is viewing. So, when looking at a daily chart, each vertical bar represents one day's worth of trading. The bar chart is unique as it offers much more than the line chart such as the open, high, low and close (OHLC) values of the bar.

The dash on the left represents the opening price and the dash on the right represents the closing price. The high of the bar is the highest price the market traded during the time period selected. The low of the bar is the lowest price the market traded during the time period selected.

The green bars are known as buyer bars as the closing price is above the opening price. The red bars are known as seller bars as the closing price is below the opening price.

In either case, the OHLC bar charts help traders identify who is in control of the market - buyers or sellers. These bars form the basis of the next chart type called candlestick charts which is the most popular type of Forex charting.

Candlestick charts.

Candlestick charts were first used by Japanese rice traders in the 18th century. They are similar to OHLC bars in the fact they also give the open, high, low and close values of a specific time period. However, candlestick charts have a box between the open and close price values. This is also known as the 'body' of the candlestick.

Many traders find candlestick charts the most visually appealing when viewing live Forex charts. They are also very popular as they provide a variety of price action patterns used by traders all over the world.

Nothing will prepare you better than demo trading - a risk-free mode of real-time trading to get a better feel for the market. It is highly recommended that you dive into demo trading first and only then enter live trading. The results will speak for themselves.

Trade with a risk-free demo account.

Practise trading with virtual funds.

Learn how to trade Forex for beginners - Forex trading systems.

Now that you know how to start trading in Forex, the next step in this Forex trading for beginners guide is to choose one of the best Forex trading systems for beginners. Fortunately, banks, corporations, investors, and speculators have been trading in the markets for decades, meaning that there is already a wide range of types of Forex trading strategies to choose from. You may not remember them all after your first read, so this is a good section to add to your Forex trading notes . These systems include:

Currency Scalping: Scalping is a type of trading that consists of buying and selling currency pairs in very short periods of time, generally between a few seconds and a few hours. This is a very practical strategy that involves making a large number of small profits in the hope those profits accumulate. Intraday Trades: Forex intraday trading is a more conservative approach that can suit beginners. It is focused on four-hour or one-hour price trends. Trades can be open between one and four hours. In general, they focus on the main sessions for each Forex market. Swing Trading: Swing trading is a medium-term trading approach that focuses on larger price movements than scalping or intraday trading. This means that traders can keep a trade open for days or a few weeks. This type of trading is a good option for those who trade as a complement to their daily work.

To compare all of these strategies we suggest reading our article "A Comparison Scalping vs Day trading vs Swing trading"

Top Forex trading platforms for beginners.

Let's look at some of the best Forex trading platforms for beginners. In addition to choosing a broker, you should also study the currency trading software and platforms they offer. The trading platform is the central element of your trading and your main work tool, making this section an integral part of your Forex trading notes . When evaluating a trading platform, especially if we are talking about trading for beginners, make sure that it includes the following elements:

Trust.

Do you trust your trading platform to offer you the results you expect? Being able to trust the accuracy of the quoted prices, the speed of data transfer and the fast execution of orders is essential to be able to trade Forex successfully. Even more so, if you plan to use very short-term strategies, such as scalping.

The information must be available in real-time and the platform must be available at all times when the Forex market is open. This ensures that you can take advantage of any opportunity that presents itself.

Security.

Will your funds and personal information be protected? A reputable Forex broker and a good Forex trading platform will take steps to ensure the security of your information, along with the ability to back up all key account information.

It will also segregate your funds from its own funds. If a broker cannot demonstrate the steps they will take to protect your account balance, it is better to find another broker.

Independent account management.

Any Forex trading platform should allow you to manage your trades and your account independently, without having to ask your broker to take action on your behalf. This ensures that you can act as soon as the market moves, capitalise on opportunities as they arise and control any open position.

Analysis.

Does the platform provide embedded analysis, or does it offer the tools for independent fundamental or technical analysis? Many Forex traders trade using technical indicators and can trade much more effectively if they can access this information within the trading platform, rather than having to leave the platform to find it. This should include charts that are updated in real-time and access to up-to-date market data and news.

A screenshot of the MetaTrader Supreme Edition provided by Admirals.

Automated trading functionality.

One of the benefits of Forex trading is the ability to open a position and set an automatic stop loss and profit level at which the trade will be closed. This is a key concept for those learning Forex trading for beginners . The most sophisticated platforms should have the functionality to carry out trading strategies on your behalf, once you have defined the parameters for these strategies.

At Admirals, the platforms are MetaTrader 4 and MetaTrader 5, which are the easiest to use multi-asset trading platforms in the world. They are two of the best platforms that offer the best online trading for beginners. Both platforms can be accessed through a variety of devices including PC, Mac, iOS and Android devices, as well as, web browsers through the MetaTrader WebTrader platform for MT4 and MT5.

These are fast, responsive platforms that provide real-time market data. Furthermore, these platforms offer automated trading options and advanced charting capabilities and are highly secure, which helps novice Forex traders.

MetaTrader 5 is the latest version and has a range of additional features, including:

Access to thousands of financial markets A Mini Terminal that offers complete control of your account with a single click 38 built-in trading indicators The ability to download tick history for a range of instruments Actual volume trading data Free-market data, news and market education.

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Is forex good for beginners? Risks every beginner should be aware of.

There are different types of risks that you should be aware of as a Forex trader. Keep the following risks in your Forex trading notes for beginners :

Leverage Risk: Leverage in trading can have both a positive or negative impact on your trading. The higher your leverage, the larger your benefits or losses. Interest Rate Risk: The moment that a country's interest rate rises, the currency could strengthen. The boost in strength can be attributed to an influx of investments in that country's money markets since with a stronger currency, higher returns could be likely. But if the interest rate falls, the currency may weaken, which may result in more investors withdrawing their investments. Transaction Risk: This risk is an exchange rate risk that can be associated with the time differences between the different countries. It can take place sometime between the beginning and end of a contract. There is a chance that during the 24-hours, exchange rates will change even before settling a trade. The transaction risk increases the greater the time difference between entering and settling a contract.

3 Forex trading strategies for beginners.

Below is an explanation of three Forex trading strategies for beginners :

1. Breakout.

This long-term strategy uses breaks as trading signals. Markets sometimes swing between support and resistance bands. This is known as consolidation. A breakout is when the market moves beyond the limits of its consolidation, to new highs or lows. When a new trend occurs, a breakout must occur first. Therefore, breaks are considered as possible signs that a new trend has started. But the problem is that not all breakouts result in new trends. Using a stop loss can prevent you from losing money.

2. Moving average cross.

Another Forex strategy uses the simple moving average (SMA). Moving averages are a lagging indicator that use more historical price data than most strategies and moves more slowly than the current market price.

In the graph above, the 25-day moving average is the orange line. As you can see, this line follows the actual price very closely. The 200-day moving average is the green line.

When the short-term moving average moves above the long-term moving average, it means that the most recent prices are higher than the oldest prices. This suggests an upward trend and could be a buy signal. Conversely, when the short-term moving average moves below the long-term moving average, it suggests a downward trend and could be a sell signal.

Rather than being used solely to generate Forex trading signals, moving averages are often used as confirmations of the overall trend. This means that we can combine these two strategies by using the trend confirmation from a moving average to make breakout signals more effective. With this combined strategy, we discard breakout signals that do not match the general trend indicated by the moving averages.

For example, if we receive a buy signal for a breakout and see that the short-term moving average is above the long-term moving average, we could place a buy order. If not, then it may be best to wait.

3. Donchian channels.

The Donchian Channels were invented by Richard Donchian. The parameters of the Donchian Channels can be modified as you see fit, but for this example, we will look at the 20-day breakdown. The indicator is formed by taking the highest high and the lowest low of a user-defined period (in this case 20-periods).

A break in the Donchian channel provides one of two things:

Buy if the market price exceeds the highest high of the last 20 periods. Sell if the market price exceeds the lowest low of the last 20 periods.

That's not all! There is another tip for trade when the market situation is more favourable to the system. This tip is designed to filter out breakouts that go against the long-term trend.

Look at the moving average of the last 25 and the last 300 days. The direction of the shorter-term moving average determines the direction that is allowed. Therefore, you may want to consider opening a position:

Short: If the 25-day moving average is less than the last 300-day moving average. Long: If the 25-day moving average is greater than the 300-day moving average.

The exit from these positions is similar to the entry but using a break from the last 10 days. This means that if you open a long position and the market moves below the 10-day minimum, you will want to sell to exit your position and vice versa.

10 Forex trading tips for beginners who want to earn.

Below are trading tips to help you excel in trading and avoid making simple mistakes.

1. Know Your Markets.

One of the most effective ways to avoid losses in trading is education of the Forex market. Taking the time to educate yourself on the currency pairs and what moves their prices before you risk your funds may save you from making simple mistakes that could cost you more than you can afford to lose. This is a time investment that may save you from stress and losing a lot of funds.

2. Stick to Your Plan.

Setting up a trading plan is an important component of avoiding losses. Many traders include their profit goals, risk tolerance level, evaluation criteria and methodology. Once you have created a plan, be sure each trade you make does not fall outside the parameters of your plan. Remember that you are likely the most rational before you enter a trade and least rational after you place it.

3. Practice.

Put your plan into practice with a free demo account. You’ll see what it’s like trading currency pairs with your trading plan without risking your capital.

4. Forecast the Market Conditions.

Some traders choose to predict the markets based on what's happening in the news or other political and financial data. These are called fundamental traders. Others choose to predict the market movements based on technical analysis tools such as moving averages, Fibonacci retracements and other indicators. These are called technical traders. Many traders use both. Regardless of your trading style, it's important to not forget about the tools available to you via your platform to help you predict the markets more accurately.

5. Know Your Limits.

This is a simple yet key rule. This includes knowing when to exit a losing trade instead of continuing to wait, setting stop loss levels accordingly, using a leverage ratio according to your needs and remembering to never risk more than you can afford to lose.

6. Know When to Stop.

You don’t have time to sit and watch the markets every minute of every day. You can better manage your risk and protect potential profits through stop and limit orders, getting you out of the market at the price you set. Trailing stops are especially helpful; they trail your position at a specific distance as the market moves, helping to protect profits should the market reverse. Placing contingent orders may not necessarily limit your risk for losses.

7. Leave Your Emotions Outside the Door.

You have an open position and the market’s not going your way. Maybe you could make it up with a trade or two that don’t fit with your trading plan. just a couple couldn’t hurt, right?

“Revenge trading” rarely ends well. Don’t let emotion get in the way of your plan for successful trading. When you have a losing trade, don’t go all-in to try to make it back in one shot; it’s smarter to stick with your plan and make the lost back a little at a time than to suddenly find yourself with two crippling losses.

8. Stay Slow and Steady.

One key to trading is consistency. All traders have lost money, but if you maintain a positive edge, you have a better chance of coming out on top. Educating yourself and creating a trading plan is good, but the real test is sticking to that plan through patience and discipline.

9. Don’t Fear Growth.

While consistency is important, don’t be afraid to re-evaluate your trading plan if things aren’t working as you thought. As your experience grows, your needs may change; your plan should always reflect your goals. If your goals or financial situation changes, so should your plan.

10. Choose the Right Broker for You.

It’s critical to choose the right trading partner as you engage the forex market. Pricing, execution, and the quality of customer service can all make a difference in your trading experience.

Final Words.

This article is an online forex trading tutorial for beginners in the UK and elsewhere. Regardless of whether you are interested in Forex trading for beginners in the UK or elsewhere, the content in this article applies to you. Due to the ability to trade online, all of the terms and concepts we discussed in this article can be applied to traders around the world.

Trading with Admirals.

If you're ready to trade on live markets, a live trading account might be suitable for you. Admirals offers traders the ability to trade with 80+ currencies, with access to a range of Forex majors, Forex minors, and exotic currency pairs. To open your live account, click the banner below!

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O que é Forex?

A abreviação Forex significa “foreign exchange”, sendo o mercado Forex conhecido em português como mercado cambial. É o maior e mais líquido espaço financeiro do mundo, contando com mais de 6,6 trilhões de dólares diários em operações, de acordo com os dados mais recentes.

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Pares de moedas e taxa de câmbio.

Em Forex, opera-se com pares de divisas. A taxa de câmbio EUR/JPY informa quantos ienes (moeda cotada ou secundária) são necessários para comprar um euro (moeda base).

Se a taxa de câmbio for 139, isso significa que cada euro pode comprar 139 ienes.

A elevação da taxa de câmbio significa que a moeda base ganhou força relativamente à secundária. Já a queda na taxa de câmbio significa o contrário.

Características do Mercado Forex.

Liquidez: devido aos 6,6 trilhões de dólares movimentados diariamente, o mercado cambial apresenta a maior liquidez do mundo. Basicamente, isso significa que você pode comprar e vender a moeda que desejar. Dinâmico e descentralizado: O mercado cambial é dinâmico e descentralizado, podendo um Forex trader investir de qualquer ponto do mundo, impactando na cotação de um par. Horario 24/5: Fator-chave que caracteriza o trading de Forex: o mercado cambial está aberto 24 horas por dia nos cinco dias úteis da semana, tornando-o bastante atrativo.

Quais fatores afetam o mercado cambial?

As transações em Forex são imediatas, sendo a cotação das moedas afetada pela lei da oferta e da demanda.

Dessa forma, a estabilidade e os eventos políticos e econômicos, bem como a política monetária dos países, são alguns dos elementos que definem as cotações.Ações de agentes econômicos privados e públicos. Os órgãos financeiros, governos e bancos centrais de cada país podem afetar diretamente a cotação de uma moeda. Por exemplo, uma elevação nas taxas de juros dos EUA poderia incrementar o valor do dólar.

Coincidentemente, os juros nos Estados Unidos vêm aumentando e a expectativa é de que subam mais. A maior economia do planeta dá sinais de sobreaquecimento, com desemprego no índice mais baixo já verificado em diversos estados. A inflação atingiu nível não visto há 40 anos. Este ano o euro esteve abaixo de 1,04 por dólar e a libra esterlina esteve a USD 1,22. Contra o iene, o dólar dos EUA superou 130, e versus o dólar canadense, chegou a 1,30.

Eventos políticos, sociais e econômicos. Se os intervenientes do mercado Forex acreditarem que um determinado evento social, político, econômico ou natural possa influenciar o fortalecimento ou enfraquecimento de uma moeda, suas operações irão alterar o preço de mercado. Quanto mais as pessoas acreditarem em uma tendência, maior será o efeito sobre as cotações. Recentemente, acontecimentos relevantes como o Brexit ou as eleições nos EUA incidiram direta e imediatamente sobre o valor do câmbio. A guerra na Ucrânia trouxe volatilidade elevada ao rublo, a moeda da Rússia.

Relatórios de organismos econômicos e sociais. A análise do endividamento junto ao FMI ou a saúde da indústria de um determinado país (sobretudo das grandes potências), assim como os dados sobre desemprego e inflação, oferecem uma visão mais translúcida sobre o que poderá ocorrer nos mercados e na economia. Por isso, também têm um peso relevante sobre as cotações do Forex.

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O que fazer ao operar Forex?

O Forex trading implica sempre em operar com um par de moedas. Por exemplo, se você acreditar que a libra esterlina (GBP) vai se valorizar comparativamente ao dólar, deverá comprar o par GBP/USD.

Pelo contrário, se sua expectativa é de que a libra sofra uma desvalorização frente ao dólar, você deverá operar vendido.

O primeiro caso é conhecido como posição comprada, em que o operador compra a moeda base (GBP) e vende a moeda secundária. No segundo, o operador abre uma posição vendida para vender a libra esterlina (GBP), a moeda base.

Forex e a Guerra na Ucrânia.

No início do conflito, a moeda russa desabou. As sanções ocidentais contra a Rússia causaram impacto imediato nas reservas internacionais do país. O Banco Central local mais que dobrou a taxa de juros para 20% ao ano, impondo, também, controle de capitais. O rublo chegou à cotação mínima de quase 140 por dólar. Desde então, a disparada nos preços do petróleo e gás natural, aliadas à imposição russa de receber em rublos pelas exportações de commodities, fizeram a moeda disparar. O rublo chegou a ser negociado a 57 por dólar.

Trading de Forex na pandemia.

O mercado de Forex foi impactado fortemente pela pandemia de Covid-19, levando os investidores a buscarem inicialmente refúgio no dólar dos Estados Unidos. Em seguida, o USD caiu frente a maioria das principais moedas, oferecendo bons retornos a quem apostou contra.

As moedas beneficiadas incluíram o euro (EUR), a libra esterlina (GBP), o dólar australiano (AUD), o dólar canadense (CAD), o dólar neozelandês (NZD), a coroa dinamarquesa (DKK), o florim húngaro (HUF), o peso mexicano (MXN), a coroa norueguesa (NOK), o zloty polonês (PLN), a coroa sueca (SEK), o dólar de Singapura (SGD), o rand sul-africano (ZAR), o peso chileno (CLP) e o novo shekel israelense (ILS).

O euro partiu de USD 1,07 para USD 1,22 em apenas nove meses. A moeda da zona do euro foi introduzida contabilmente em 1999, entrando em circulação fisicamente em 2002. Sua mínima histórica foi de USD 0,8231 no ano 2000 e a máxima foi de USD 1,6038 em 2008. O euro é gerido pelo Banco Central Europeu, com sede em Frankfurt.

Conforme mencionado acima, o par GBP/USD também foi afetado pela pandemia. A libra esterlina chegou a valer apenas USD 1,15, mas a cotação subiu para USD 1,34 seis meses depois.

A AvaTrade permite a você operar Forex, opções de Forex e CFDs sobre dezenas de pares de divisas (criptomoedas e mais).

A AvaTrade oferece os seguintes pares com o dólar dos EUA: EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CAD, USD/CHF, USD/CNY, USD/DKK, USD/HUF, USD/MXN, USD/NOK, USD/PLN, USD/RUB, USD/SEK, USD/SGD, USD/TRY, USD/ZAR, USD/CLP e USD/ILS.

Por que o dólar perdeu força semanas após a declaração da Organização Mundial da Saúde?

Há algumas respostas para a pergunta acima. Os Forex traders ficaram mais confiantes no fim da pandemia e passaram a vender dólares. Além disso, o grande estímulo econômico dado pelo Federal Reserve (Fed), o banco central dos EUA, contribuiu para o enfraquecimento da moeda. A medida acendeu um debate já antigo, mas nunca verificado, sobre a tendência dos Estados Unidos de perder o posto de emissor da moeda de reserva mundial.

Além dos EUA, Panamá, Equador, El Salvador, Zimbábue, Micronésia, Ilhas Marshall, Palau e Timor Leste utilizam o dólar como moeda corrente.

O Banco Central Europeu também introduziu estímulos econômicos para aliviar a crise causada pela pandemia de Covid-19, trazendo desconforto a alguns traders de Forex. Contudo, as manchetes questionando a longevidade do euro, comuns no auge da crise, deixaram de aparecer.

O euro é oferecido pela AvaTrade a traders de Forex, tanto iniciantes como experientes, nos seguintes pares: EUR/USD, EUR/JPY, EUR/CHF, EUR/GBP, EUR/CAD, EUR/AUD, EUR/DKK, EUR/HUF, EUR/NOK, EUR/NZD, EUR/PLD, EUR/RUB, EUR/SEK, EUR/TRY e EUR/ZAR.A moeda é corrente na Áustria, Bélgica, Chipre, Estônia, Finlândia, França, Alemanha, Grécia, Irlanda, Itália, Letônia, Lituânia, Luxemburgo, Malta, Holanda, Portugal, Eslováquia, Eslovênia e Espanha.

A moeda é corrente na Áustria, Bélgica, Chipre, Estônia, Finlândia, França, Alemanha, Grécia, Irlanda, Itália, Letônia, Lituânia, Luxemburgo, Malta, Holanda, Portugal, Eslováquia, Eslovênia e Espanha.

O iene é a terceira principal moeda de reserva mundial, estando disponível na AvaTrade nos pares USD/JPY, EUR/JPY, AUD/JPY, GBP/JPY, CAD/JPY, CHF/JPY e NZD/JPY.

Conforme dados do FMI, USD 7,1 trilhões das reservas de Forex mundiais são mantidas em dólares dos EUA, USD 2,5 trilhões em euros, USD 672 bilhões em ienes, USD 576 bilhões em libras esterlinas, USD 218 bilhões em dólares australianos, USD 287 bilhões em dólares canadenses e USD 25 bilhões em francos suíços. O renminbi chinês é responsável por USD 336 bilhões.

Por que operar em Forex com a AvaTrade?

Quando você opera em Forex, deve poder fazê-lo com segurança. Nenhuma empresa pode prometer benefícios, mas na AvaTrade estamos comprometidos a estabelecer valores que definem a relação com os nossos clientes.

Por isso, desejamos proporcionar a você a melhor formação possível em trading, tanto para traders principiantes como experientes, oferecendo atendimento multilíngue da mais alta qualidade, e incluindo a plataforma de investimentos mais avançada e fácil de usar.

Na AvaTrade estamos comprometidos a inovar de forma constante. Abra uma conta de trading online ou Forex teste e una-se à nossa empresa para obter a melhor experiência em trading.

Abra uma conta online e una-se à nossa empresa para obter a melhor experiência em trading.

FAQ.

Como operar no mercado de Forex?

O mercado Forex, ou mercado cambial, opera por meio de pares de divisas, ou seja, de moedas. Para investir nesse mercado, você tem duas opções – uma posição comprada, quando compra a moeda base e vende a secundária, ou uma posição vendida, vendendo a moeda base escolhida. Para que esta operação seja bem-sucedida, é necessário estar atento às flutuações das taxas de câmbio.

Qual é a plataforma para operar Forex?

Quando você opera com Forex, deve colocar a segurança em primeiro lugar. Para isso, procure uma empresa que garanta a sua proteção, mas também ofereça uma boa experiência de negociação. Na AvaTrade você encontra o melhor treinamento em trading — seja para iniciantes ou experientes —, uma grande variedade de moedas, atendimento em várias línguas e uma plataforma intuitiva e repleta de recursos.

Como funciona o forex?

Forex é uma troca peer-to-peer no mercado de balcão. Isso significa que não há troca forex centralizada como existe nos mercados de ações. Em vez disso, o mercado forex é administrado pela rede global de bancos e outras instituições. Sem localização central, os mercados forex negociam continuamente em todo o mundo, e as negociações podem ser realizadas 24 horas por dia de todos os cantos do globo. Como a maioria dos comerciantes nunca receberá a entrega física da moeda, eles estão negociando derivativos são usados para negociar mudanças de preço nos mercados. Isso permite que um trader especule sobre os movimentos de preços sem se apropriar do ativo.

Forex trade 6

What is forex trading and how does it work?

The first two letters in the code represent the country, and the third letter identifies the currency, such as the code JPY = Japanese Yen.

Forex prices are known as rates , and they express the value of one currency in terms of the other.

For example, a price or rate in euro-dollar could be quoted as:

The currency to the left of the slash is the base currency (in this example, the euro), and the currency on the right-hand side is the quote currency (in this example, the US dollar).

For traders using one of our free MetaTrader platforms, currency currency pairs are displayed on MT4 and MT5 without the slash (/) so you'll see pairs communicated as EURUSD rather than"EUR/USD.

Looking at this currency notation above, we can see that 1 unit of the base currency (1 euro) is equal to 1.23700 US dollars, which means to buy 1 euro, you’ll have to pay 1.23700 US dollars.

If you’re selling, the FX rate specifies how many units of the quote currency you get in exchange for one unit of the base currency. In the example above, the rate tells us that you'll receive 1.23700 US dollars when you sell 1 euro.

When should I buy?

A trader will open a buy or long position if they believe that the value of a specific base currency will increase .

When should I sell?

A trader would open a sell or short position if they believe that the value of a specific base currency will decrease .

When can currencies be traded?

The forex market is unique among the world’s financial markets in that it's open for trading 24 hours a day, 5 days a week.

The tables below list both the GMT and EST trading times for the FX markets. Trading sessions are according to GMT (Greenwich Mean Time):

Region City Open (GMT) Close (GMT) Europe London 8:00 am 5:00 pm Europe Frankfurt 7:00 am 4:00 pm America New York 1:00 pm 10:00 pm America Chicago 2:00 pm 11:00 pm Asia Tokyo midnight 9:00 am Asia Hong Kong 1:00 am 10:00 am Pacific Sydney 10:00 pm 7:00 am Pacific Wellington 10:00 pm 6:00 am.

Trading sessions according to EST (Eastern Standard Time):

Region City Open (GMT) Close (GMT) Europe London 3:00 am 12:00 noon Europe Frankfurt 2:00 am 11:00 am America New York 8:00 am 5:00 pm America Chicago 9:00 am 6:00 pm Asia Tokyo 7:00pm 4:00 am Asia Hong Kong 8:00 pm 5:00 am Pacific Sydney 5:00 pm 2:00 am Pacific Wellington 5:00 pm 1:00 am.

*Trading hours may vary with daylight savings time.

What's next?

Find out more about how to get started with a live trading account.

Want to learn more about forex trading? Start with our top ten trader terms used in trading"circles.

Ready to trade?

It's quick and easy to get started – even with a small deposit. Apply in minutes with our simple application process.

Forex trade 5

The cost of trading forex.

The cost of trading is the overall expense that a forex trader has to incur in order to run their trading business. There are optional costs for things that the trader may wish to purchase, such as news services, custom technical analysis services and faster connections, and compulsory costs , which are expenses that every trader must pay.

The cost of trading is the overall expense that a trader has to pay in order to run their trading business.

For every trade that you place, you will have to pay a certain amount in costs or commissions for each trade that you place with a broker. These costs vary from broker to broker, but they are usually a relatively low amount. These are usually the only cost of trading that you are likely to incur.

This may sound like a simple enough process, but many traders overlook these costs of trading and thus underestimate the challenges to generate a long-term profit.

For many forex traders, failure to make a profit is not always down to not being able to trade well – sometimes a mismanagement or underestimation of the costs involved can lead to failure when the trading results should, in theory, lead to success.

By taking a look at the main costs of trading, a trader can be more prepared to manage their capital.

Forex spreads and commissions.

Remember: Costs vary from broker to broker, so make sure that you check the rates on offer before placing any trade. Many retail brokers, for example, do not charge direct commissions, instead adding their costs onto the spread.

The most common costs associated with trading are the spread and commission fees charged by the broker for each trade placed. These costs are incurred by the trader regardless of how successful those trades are.

What does the term “spread” actually mean?

The easiest way to understand the term spread is by thinking of it as the fee your broker charges you to trade. Your broker will quote or give you two prices for every currency pair that they offer you on their trading platform: a price to buy at (the bid price) and a price to sell at (the ask price).

The spread is the difference between these two prices and what the broker charges you. This is how they make their money and stay in business.

To illustrate, let's say you want to make a long (buy) trade on the EUR/USD and your price chart shows a price of 1.2000.

The broker, however, will quote two prices, 1.2002 and 1.2000. When you click the buy button, you will be entered into a long position with a fill at 1.2002. This means that you have been charged 2 pips for the spread (the difference between the price 1.2002 and 1.2000).

Now say you want to make a short (sell) trade and again, the price chart shows a price of 1.2000. The broker will fill your trade at 1.2000, however, when you exit the trade – in other words buying back the short position – you will still pay the spread. This is because whatever the price shows at the time you want to exit your trade, you will be filled two pips above that price. For example, if you wanted to exit at 1.9980, you will in fact exit your trade at 1.9982.

The spread is the difference in the buy and sell price of any asset or currency pair.

Therefore, the spread is a cost of trading to you and a way of paying the broker. The bid price is the highest price the broker will pay to purchase the instrument from you and the ask price is the lowest price the broker will pay to sell the instrument to you.

In order for a trader to make a profit or avoid making a loss on a trade, the price must move enough to make up for the cost of the spread.

Variable rate spreads.

It is also worth noting that the spread you pay can be dependent on market volatility and the currency pair that is traded. These variable spread fees are commonplace in markets where there is higher volatility.

A spread you pay can be dependent on market volatility and the currency pairing that is traded.

For example, if a market is quiet, i.e. there is not much market activity and the volatility is low, the broker may charge a +2 pip spread. But if volatility increases or liquidity decreases, the broker/spread dealer may change that to incorporate the additional risk of the faster, thinner market and so they may increase the spread.

Some brokers also charge a commission for handling and executing the trade. In these circumstances the broker may only increase the spread by a fraction or not at all, because they make their money mainly from the commission.

What is commission and how is it calculated?

Commission in forex trading can either be a fixed fee – a fixed sum regardless of volume – or a relative fee – the higher the trading volume, the higher the commission.

A commission is similar to the spread in that it is charged to the trader on every trade placed. The trade must then attain profit in order to cover the cost of the commission.

Forex commissions can come in two main forms:

Fixed fee – using this model, the broker charges a fixed sum regardless of the size and volume of the trade being placed. For example: With a fixed fee, a broker may charge a $1 commission per executed transaction, regardless of the size involved. Relative fee – the most common way for commission to be calculated. The amount a trader is charged is based on trade size; for example, the broker may charge “$x per $million in traded volume”. In other words, the higher the trading volume, the higher the cash value of the commissions being charged.

With a relative fee, a broker may charge $1 per $100,000 of a currency pairing that is bought or sold. If a trader buys $1,000,000 EURUSD, the broker receives $10 as a commission. If a trader buys $10,000,000 the broker receives $100 as a commission.

Note: The relative fee is, in some cases, variable and based on the amount that is bought or sold.

For example, a broker may charge $1 commission per $1,000,000 of a currency pairing bought or sold up to a transaction limit of $10,000,000.

If a trader buys $10,000,000 EURUSD, the broker receives $10 as a fee. However, if a trader buys more than $10,000,000 EURUSD, they will become subject to the new fee. Usually the commission is on a sliding scale to encourage larger trades, however, there are different permutations from broker to broker.

Additional fees to consider.

There are also hidden fees with some brokerages. Some of the fees you should look out for include inactivity fees, monthly or quarterly minimums, margin costs and the fees associated with calling a broker on the phone.

There are additional, hidden fees a trader should keep in mind, like inactivity fees, monthly or quarterly minimums, margin costs and fees associated with calling a broker on the phone.

Before making a judgement on which commission model is the most cost-effective, a trader must consider their own trading habits. For example, traders who trade at high volumes may prefer to pay only a fixed fee in order to keep costs down. While smaller traders, who trade relatively low volumes, may tend to prefer a commission based on trade size option as this results in smaller relative fees for their trading activity.

Leverage.

Leverage is a tool that traders use as way to increase returns on their initial investment. One reason that the forex markets are so popular amongst investors is because of the easy access to leverage. However, when factoring in spreads and commissions, traders must be careful of their use of leverage because this can inflate the costs of each trade to unmanageable levels.

Overnight positions.

When trades are held overnight there is another cost that should be factored in by the trader holding the position.

This cost is mainly centred on the forex market and is called the overnight rollover.

Every currency you buy and sell comes with its own overnight interest rate attached. The difference between the two interest rates of the currencies you are trading will give you the cost of holding the position overnight. These rates are not determined by your broker, but at the Interbank level.

These trading costs are percentage-based and would increase as the use of leverage goes up; the more leverage a trader uses, the higher these costs become.

For example, if you buy the GBP/USD, then the rollover will depend on the difference between the interest rates of the UK and the USA .

If the UK had an interest rate of 5% and the USA had a rate of 4%, the trader would receive a payment of 1% on their position because they were buying the currency from the nation with the higher interest rate – if they were selling this currency, then they would be charged 1% instead.

Data feeds.

Aside from the transactional costs of trading, extra costs should be factored in by traders when calculating their overall profitability.

Data feeds help the trader see what is happening in the markets at any given time in the form of news and price action analysis.

This data is then used by the trader to make important decisions:

When to enter and exit the market How to manage any open positions Where to set stop losses.

This data is therefore directly linked to the performance of the trader; good efficient data is vital in order to maintain a constant edge in the markets.

Data feeds help a trader see what is happening in the markets in the form of news and price action analysis . Traders use this data to decide when to enter/exit the market, how to manage open positions and where to place their stop loss.

These costs are usually a fixed price charged monthly. The costs vary between providers, as does the quality and nature of their data feeds. It is important that traders determine which kind of feed they feel most comfortable and confident using before committing money to any feed provider.

Other additional costs to a trader may include subscriptions to magazines or.

television packages, which enable access to non-stop financial news channels. The cost of attending exhibitions, shows or tutorials may also need to be considered if you are a novice trader. Aside from this are the obvious necessary costs of owning a reliable PC or laptop, and cupboards stocked with plenty of coffee!

Every trader needs a trading journal. As a Tradimo user, you qualify for the $30 discount on the Edgewonk trading journal. Simply use the code “ tradimo ” during the checkout process to get $30 off . Use this link to get the discount.

Summary.

In this lesson, you have learned that:

not paying attention to all of the costs can limit your ability to make a profit. there are optional costs and compulsory costs. compulsory costs include spreads and commissions charged by the broker. optional costs include additional data feeds and news services. other costs involve overnight rollover fees, which is the difference in interest rates between the two countries of the currency pairs you are trading. leverage can magnify gains, but also magnify the cost of trading.

Forex trade 3

Forex trading.

Foreign exchange (FX or forex) trading is when you buy and sell foreign currencies to try to make a profit. Even the most skilled and experienced traders have difficulty predicting movements in currencies.

How forex trading works.

Foreign exchange trading attempts to make a profit by predicting the value of one currency compared to another.

FX trading is normally conducted through 'margin trading'. A small collateral deposit worth a percentage of a total trade's value is required to trade.

Trading in international currencies requires a huge amount of knowledge, research and monitoring. Before you put your money on the line, get independent advice from a licensed financial adviser.

Margin FX trading is one of the riskiest investments you can make. It raises the stakes further by letting you trade with borrowed money, but you'll be responsible for all losses. This may exceed your initial investment.

Contracts for difference (CFDs)

Contracts for difference (CFDs) are a way of betting on the change in value of a foreign exchange rate. CFDs can also bet on a change in share price or a market index. You're not buying the underlying asset, just betting on the price movement.

CFDs often use borrowed money, which can magnify gains or losses. For every person who wins, there is a person on the other side of the contract who loses the same amount. You will also have to pay expenses.

CFDs are generally highly geared products. The money you invest will generally only be a fraction of the market value of what you're 'contracting' for.

The contract is a legally binding agreement, no matter what the market value of the asset is. If the market turns against you, the issuer of the contract:

will require you to pay extra money may close out your contract, for whatever it's worth at the time, to recover some money. If there's not enough money, you will still be legally obliged to make up the difference.

Risks of forex trading.

Small market movements can have a big impact . Most FX trading products are highly leveraged. You only pay a fraction of the value of your trade up-front, but you are still responsible for the full amount of the trade. Exchange rates are very volatile . They tend to move around a lot even within very short periods of time. There are significant investment risks as currency fluctuations may move against you, causing you to lose money. Currency markets are extremely difficult to predict . Many difference factors affect exchange rates Limited protection from risk management systems . Stop loss orders will only cap your losses. You may also pay a premium price to guarantee your stop loss order. Forex scams and fraud. Offers and advertisements that sound too good to be true probably are. Read what the US Commodity Futures Trading Commission has to say about foreign currency trading fraud. Forex provider risks. If your FX provider became insolvent, you may not get your money back. Trading delays can severely affect results. You may not be able to make trades when you'd like to, because of a lack of liquidity in the market, execution risk, or computer system problems.

Forex trading software programs, seminars and courses.

Forex software programs available for forex trading. They may claim their programs can let you know when to make trades. But no person or program can ever accurately predict movements in foreign currencies.

Be wary of companies promoting a particular product that gives you access to better exchange rates or easy money. They may let you trial their trading platform for free at first. This is usually just a teaser for you to buy the software or platform.

A basic FX trading course or seminar won't give you enough information to start trading.

Do your own checks on forex providers.

Different forex products involve different risks. Read the product disclosure statement (PDS) carefully before investing.

Check that the forex provider has an Australian Financial Services (AFS) Licence. ASIC Connect's Professional Registers will tell you if they do.

If the provider doesn't have an AFS licence, check it's regulated by an appropriate overseas authority. Trading with these providers may not give you recourse to Australian laws. See check an investment company or scheme.

Costa loses $56,000 through a dating app scam.

Costa started chatting with Cindy through a dating app. After a couple of days, Cindy suggested they switch to a private messaging app so they could chat more often. After about a week of constant chatting, Costa felt a really strong connection with Cindy.

Cindy shared how she had made a lot of money through online foreign exchange (forex) trading. Cindy shared screenshots that showed she was making between $US10,000 to $18,000 on single trades. Cindy sent Costa a link to the website of the company she used. Costa’s online research about the company revealed some negative reviews. Cindy explained the reviews were from competitors trying to undermine the company’s success.

Costa was hesitant to create a trading account with the company. Cindy became very distressed that Costa did not trust her. She continued to pressure Costa into opening an account. Costa finally agreed. Cindy helped Costa to open an account, download a forex trading app and make trades.

Within three days, Costa had transferred the $A51,000 minimum deposit to his account with the company. Cindy helped Costa make trades on the forex trading app. Over the first few days, Costa made between $US50 and $US500 a day. Cindy encouraged Costa to transfer another $A5,000 to his account.

The next day, Cindy told Costa she had made a mistake on a trade. Cindy said she had lost his entire account balance in minutes. Cindy stopped responding to Costa.

Costa realised he had been scammed, and he reported it to the company. The company closed Costa's trading account. Cindy and the company ceased all communication with him.

Costa found out that the company was based overseas and not licensed in Australia. There was little hope of Costa recovering the money he lost.

Forex trade 2

How to Trade Forex.

Many want to make money in the forex market, but few who begin to trade forex want to do the prep work needed to become successful traders. While trading forex has become easier now than ever before because you can trade online via the internet, most novice traders still lose money.

A combination of factors that include unfamiliarity with the market, insufficient trading capital, not trading according to a plan and failing to practice sound money management techniques to preserve trading capital contribute to the loss. But, once these inhibitory factors are overcome, just about anyone has a chance at becoming a successful forex trader.

Get Started.

Earn cash back on your FX trades.

Open an account in as little as 5 minutes. Spot opportunities, trade and manage your positions from a full suite of mobile and tablet apps.

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5 Easy Steps to Trade Forex Common Forex Market Terms Forex Trading Example Forex Trading Strategy Types Forex Market Analysis Forex Trading Tutorial How to Develop a Forex Trade Plan Best Online Forex Brokers to Kickstart Your Forex Trading Is Forex Trading Right for You? Frequently Asked Questions.

5 Easy Steps to Trade Forex.

You can take the following steps to prepare yourself to start trading forex:

1. Connect a Device to the Internet.

To trade forex, you’ll need access to a reliable Internet connection with minimal service interruptions to trade through an online broker. You’ll also need to obtain a smartphone, tablet or computer to run a trading platform on. If your internet drops while you’re trading, that can result in undesirable losses if the market moves against you.

2. Find a Suitable Online Forex Broker.

You can probably open an account with an online forex broker no matter where you live. Just look for one that meets your requirements as a trader and will accept you as a client. At a minimum, the broker you choose should keep your money segregated from its own and operate in a well-regulated jurisdiction under the oversight of a reputable regulator, such as the UK’s Financial Conduct Authority (FCA) or the U.S. Commodity Futures Trading Commission (CFTC).

3. Open and Fund a Trading Account.

After you’ve decided on a broker, you can deposit funds into a trading account. Most online forex brokers accept a number of ways to fund an account, including bank wire transfers, debit card payments or transfers from electronic payment providers like Skrill or PayPal.

4. Obtain a Forex Trading Platform.

You will need to download or get access to an online forex trading platform supported by your broker. Most forex brokers either offer a proprietary trading platform or support a popular 3rd-party platform like MetaTrader4 and 5 (MT4/5) from MetaQuotes.com or NinjaTrader.

5. Start Trading.

After completing all of the previous steps, you now have a funded forex account and are ready to trade. You can also usually open a demo account funded with virtual money to test out the broker’s forex platforms and services before going live. Demo accounts are also beneficial for testing trading strategies and to practice trading without risking any funds.

Common Forex Market Terms.

The forex market is a world unto itself and has some substantial differences to other financial markets, such as the stock or commodity markets. As a case in point, forex traders have even developed their own set of jargon terms unique to the forex market.

If you’re serious about learning how to trade forex, you should start to get a handle on forex terminology by reviewing the definitions for common terms used in the forex market below.

Currency pair: Two currencies in which the first, known as the base currency, is quoted in terms of the second, known as the counter currency. An example of a currency pair is EUR/USD that represents the EU’s euro quoted versus the U.S. dollar. CFD : A Contract for Difference is a tool disallowed in the U.S. but offered in certain overseas markets. In essence, if you used a CFD to buy currency for $10 and sold the position for $11, you would get $1. If you sold short on that position, you would pay $1. This method of investing helps you invest in futures without owning the product. Commodity currencies : Currencies from countries where the economy relies heavily on commodity exports. Examples include: New Zealand, Russia, Canada, Australia, etc. Derivative : A financial tool that derives its value from another asset, like a currency. Forex derivatives are popular because they can combine the values of two or more currencies and trade shares based on that value. Position: The net amount of a currency pair that provides exposure to movements in that pair’s exchange rate. Forex traders take positions to speculate on exchange rate movements. Long/short: A position in which one has net purchased/sold the base currency in a currency pair. Long positions are taken when you think the pair’s exchange rate will rise, while short positions are taken when you think the exchange rate will fall. Pip: An acronym for “point in percentage” that represents the smallest change in a currency pair’s exchange rate. The size of a pip for most currency pairs is 0.0001. Leverage/margin: Leverage is the size of a trading position you can control with a given amount of “margin” or money placed on deposit in your trading account to be held by your broker as collateral against trading losses. The maximum leverage ratio varies considerably among online brokers — ranging from 20:1 to 1,000:1 or more — and can depend on what jurisdiction you reside in. Exchange rate: The amount of the counter currency required in exchange for one unit of the base currency in a foreign exchange transaction. For example, if the EUR/USD exchange rate is 1.1700, it would cost $1.17 to buy 1 euro. Risk/reward ratio: An estimated measure of the profit potential per amount risked. For example, a trader might use a 1:3 risk/reward ratio meaning that they are willing to risk $1 to make $3. Broker: An intermediary firm that executes transactions in financial markets on your behalf. Retail forex traders open trading accounts with online brokers to trade currency pairs on margin. Order: An instruction given to your broker to execute a transaction for you. You might place an order to buy 100,000 euros versus the U.S. dollar at the prevailing market via your online broker’s trading platform.

Forex Trading Example.

The most actively traded currency pair in the forex market is EUR/USD, which consists of the EU’s euro quoted with the U.S. dollar. If you thought the EUR/USD exchange rate was going to rise from its current 1.1700 level, then you might purchase €100,000 against the dollar today at that rate. If the EUR/USD rate then rose to 1.2000, you could use this calculation to compute your trading profit:

€100,000 x (1.2000-1.1700) = $3,000.

To then convert that amount of U.S. dollar profit into euros at the current 1.2000 exchange rate, you would use this calculation:

$3,000 ÷ 1.2000 = €2,500.

Alternatively, if the EUR/USD exchange rate instead fell to 1.1400, then your trading loss would be:

€100,000 x (1.1700-1.1400) = -$3,000.

That loss converted into euros at the prevailing 1.1400 exchange rate would be:

-$3,000 ÷ 1.1400 = -€2,631.58.

Forex Trading Strategy Types.

Now that you have a live trading account at a reputable online broker, you should plan on developing a trading strategy to boost your chances of success in the market. One or more strategies could suit your personality and level of market expertise, and the general strategy types discussed below are in common use among retail forex traders.

Scalping.

A very active strategy in which the scalper aims to profit from very short-term market moves. They enter and exit the market quickly to capture a few pips of profit at a time.

Day Trading.

A strategy in which positions are entered and exited throughout the day but closed out by the end of the single trading session. Day traders generally avoid taking the extra risk involved in holding positions overnight.

Swing Trading.

A “buy low, sell high” type of trading strategy, swing or momentum trading involves getting into and out of the market usually based on signals from momentum technical indicators like the RSI. Swing traders often take overnight positions.

Trend Trading.

A longer-term trading strategy that involves estimating intrinsic value and looking for established directional movements known as trends. These traders establish and hold positions to profit from the trend until it ends.

Forex Market Analysis.

Experienced traders have typically learned how to analyze the forex market to make better trading decisions. They generally use one or both of the well-established market analysis methods described below.

Technical Analysis.

Technical analysis is a form of detailed market examination used by traders to forecast future market moves and identify trading opportunities based on patterns seen on charts and computed indicators. Technical analysts generally think that past trading activity can indicate an asset’s future value. This form of analysis tends to be more useful for predicting short-term market moves.

A 15-minute candlestick chart of the exchange rate of the EUR/USD currency pair showing the 10-period moving average and 14-period relative strength index (RSI) indicators that can help technical traders identify opportunities. Source: MetaTrader .

Fundamental Analysis.

Fundamental analysis is a method of valuing an asset by attempting to determine its intrinsic value. Fundamental analysts often examine relevant economic and financial factors, as well as other qualitative and quantitative information. Fundamental forex traders might be especially interested in economic calendars, such as the one shown below.

An economic calendar showing high impact events for the forex market occurring during the week of October 4-10, 2022. The calendar shows forecasts and previous results whenever possible and actual results for events that have already occurred. Source: ForexFactory.

Forex Trading Tutorial.

We’ve got top forex trader Ezekiel Chew, who makes 6 figures a trade and trains the bank traders behind the scenes, to share with us how to trade forex and what exactly it takes to be successful in forex trading.

Ezekiel believes there are three key aspects to successful trading:

1. You’ve First Got to Learn How to Read the Charts.

And one of the best ways to learn this is through price action; the technique that the majority of professional traders use. Once you have learned how to read the charts, you will know why the market is going up, down or sideways and then will you recognize which strategy to put into play in that direction.

2. Trade with a Proven Forex Trading Strategy or a Combination of Strategies.

A proven strategy is one that is comprehensively back-tested and has been shown to work consistently. It is only in this way that you will have the confidence to stick with it during the lull periods.

3. Have a Solid Trading System.

One that is defined not only by the technical aspects but also the business behind trading; a proper structured trade that is in line with the overall trading plan that has been proven to work. In contrast to what most new traders think, trading is not just about strategies, but the system itself also contributes greatly to becoming a successful trader.

Most of all, Ezekiel has a famous trading mantra - “Win big, lose small” that he and his students abide by.

“Forex trading is all about having an edge in the game and knowing the mathematical probability behind each trade”. By winning big and losing small, a single win can potentially cover 3 or more losses. If you apply this methodology in the long run, you will be a winning trader.

To learn more about Ezekiel’s method of trading backed by mathematical probability, you can check out his one core program.

Forex trade 1

Know When to Buy or Sell a Currency Pair.

Forex trading involves trying to predict which currency will rise or fall versus another currency.

How do you know when to buy or sell a currency pair?

In the following examples, we are going to use a little fundamental analysis to help us decide whether to buy or sell a specific currency pair.

The supply and demand for a currency changes due to various economic factors, which drives currency exchange rates up and down.

Each currency belongs to a country (or region). So forex fundamental analysis focuses on the overall state of the country’s economy, such as productivity, employment, manufacturing, international trade, and interest ratezzzzzzzz.

If you always fell asleep during your economics class or just flat-out skipped economics class, don’t worry!

We will cover fundamental analysis in a later lesson.

But right now, try to pretend you know what’s going on…

EUR/USD.

In this example, the euro is the base currency and thus the “basis” for the buy/sell.

If you believe that the U.S. economy will continue to weaken, which is bad for the U.S. dollar, you would execute a BUY EUR/USD order.

By doing so, you have bought euros with the expectation that it will rise versus the U.S. dollar.

If you believe that the U.S. economy is strong and the euro will weaken against the U.S. dollar, you would execute a SELL EUR/USD order.

By doing so, you have sold euros with the expectation that it will fall versus the US dollar.

USD/JPY.

In this example, the U.S. dollar is the base currency and thus the “basis” for the buy/sell.

If you think that the Japanese government is going to weaken the yen in order to help its export industry, you would execute a BUY USD/JPY order.

By doing so you have bought U.S dollars with the expectation that it will rise versus the Japanese yen.

If you believe that Japanese investors are pulling money out of U.S. financial markets and converting all their U.S. dollars back to yen, and this will hurt the U.S. dollar, you would execute a SELL USD/JPY order.

By doing so you have sold U.S dollars with the expectation that it will depreciate against the Japanese yen.

GBP/USD.

In this example, the pound is the base currency and thus the “basis” for the buy/sell.

If you think the British economy will continue to do better than the U.S. in terms of economic growth, you would execute a BUY GBP/USD order.

By doing so you have bought pounds with the expectation that it will rise versus the U.S. dollar.

If you believe the British economy is slowing while the American economy remains strong like Chuck Norris, you would execute a SELL GBP/USD order.

By doing so you have sold pounds with the expectation that it will depreciate against the U.S. dollar.

How to trade forex with USD/CHF.

In this example, the U.S. dollar is the base currency and thus the “basis” for the buy/sell.

If you think the Swiss franc is overvalued, you would execute a BUY USD/CHF order.

By doing so you have bought U.S. dollars in the expectation that it will appreciate versus the Swiss Franc.

If you believe that the U.S. housing market weakness will hurt future economic growth, which will weaken the dollar, you would execute a SELL USD/CHF order.

By doing so, you have sold U.S. dollars with the expectation that it will depreciate against the Swiss franc.

Trading in “Lots”

When you go to the grocery store and want to buy an egg, you can’t just buy a single egg, they come in dozens or “lots” of 12.

In forex, it would be just as foolish to buy or sell 1 euro, so they usually come in “lots” of 1,000 units of currency (micro lot), 10,000 units (mini lot), or 100,000 units (standard lot) depending on your broker and the type of account you have (more on “lots” later).

Margin Trading.

“But I don’t have enough money to buy 10,000 euros! Can I still trade?”

You can! By using leverage .

When you trade with leverage, you wouldn’t need to pay the 10,000 euros upfront. Instead, you’d put down a small “deposit”, known as margin .

Leverage is the ratio of the transaction size (“position size”) to the actual cash (“trading capital”) used for margin.

For example, 50:1 leverage , also known as a 2% margin requirement , means $2,000 of margin is required to open a position size worth $100,000.

Margin trading lets you open large position sizes using only a fraction of the capital you’d normally need.

This is how you’re able to open $1,250 or $50,000 positions with as little as $25 or $1,000.

You can conduct relatively large transactions with a small amount of initial capital.

We will be discussing margin in more detail later, but hopefully, you’re able to get a basic idea of how it works.

Listen carefully because this is very important!

You believe that signals in the market are indicating that the British pound will go up against the U.S. dollar. You open one standard lot (100,000 units GBP/USD), buying with the British pound with a 2% margin requirement. You wait for the exchange rate to climb. When you buy one lot (100,000 units) of GBP/USD at a price of 1.50000, you are buying 100,000 pounds, which is worth $150,000 (100,000 units of GBP * 1.50000). Since the margin requirement was 2%, then US$3,000 would be set aside in your account to open up the trade ($150,000 * 2%). You now control 100,000 pounds with just $3,000. Your predictions come true and you decide to sell. You close the position at 1.50500. You earn about $500.

When you decide to close a position, the deposit (“margin”) that you originally made is returned to you and a calculation of your profits or losses is done.

This profit or loss is then credited to your account.

Let’s review the GBP/USD trade example above.

GBP/USD went up by a mere half a pence! Not even one pence. It was half a pence! But you made $500! �� While taking a power nap! How? Because you weren’t trading just £1. If your position size was £1, yes, you would’ve made only half a pence. But…your position size was £100,000 (or $150,000) when you opened the trade. What’s neat is that you didn’t have to put up that entire amount. All that was required to open the trade was $3,000 in margin. $500 profit from $3,000 in capital is a 16.67% return! �� In twenty minutes! That’s the power of leveraged trading!

A small margin deposit can lead to large losses as well as gains.

It also means that a relatively small movement can lead to a proportionately much larger movement in the size of any loss or profit which can work against you as well as for you.

You could’ve easily LOST $500 in twenty minutes as well.

You wouldn’t have woken up from a nightmare. You would’ve woken up into a nightmare!

High leverage sounds awesome, but it can be deadly.

For example, you open a forex trading account with a small deposit of $1,000. Your broker offers 100:1 leverage so you open a $100,000 EUR/USD position.

A move of just 100 pips will bring your account to $0! A 100-pip move is equivalent to €1 ! You blew your account with a price move of a single euro. Congrats. ��

When trading on margin, it’s important to be aware that your risk is based on the full value of your position size. You can quickly blow your account if you don’t understand how margin works. We want you to AVOID this . Due to this danger, we dedicate an entire section on how margin trading works, called Margin Trading 101.

Rollover.

For positions open at your broker’s “cut-off time” (usually 5:00 pm ET), there is a daily “rollover fee“, also known as a “swap fee” that a trader either pays or earns, depending on the positions you have open.

If you do not want to earn or pay interest on your positions, simply make sure they are all closed before 5:00 pm ET, the established end of the market day.

Since every currency trade involves borrowing one currency to buy another, interest rollover charges are part of forex trading.

Interest is PAID on the currency that is borrowed.

Interest is EARNED on the one that is bought.

If you are buying a currency with a higher interest rate than the one you are borrowing, then the net interest rate differential will be positive (i.e. USD/JPY) and you will earn interest as a result.

Conversely, if the interest rate differential is negative then you will have to pay .

For more information on how a rollover works, check out our Forexpedia page on rollover.

Note that many retail forex brokers do adjust their rollover rates based on different factors (e.g., account leverage, interbank lending rates).

Please check with your broker for more information on their specific rollover rates and crediting/debiting procedures.

Here is a table to help you figure out the interest rate differentials of the major currencies.

Central Bank Interest Rates.

Country Currency Interest Rate United States USD 3.25% Eurozone EUR 1.50% United Kingdom GBP 2.25% Japan JPY -0.10% Canada CAD 3.75% Australia AUD 2.60% New Zealand NZD 3.50% Switzerland CHF 0.50%

Later on, we’ll teach you all about how you can use interest rate differentials to your advantage.