To open forex trading account, we only need to take a few simple procedures, but first and foremost, I would recommend that newcomers open a demo account. In demo accounts you have a virtual amount and it has no chances of any loss or wins. It is used by newbies and is used for practice. While in real ones you do have a high-risk factor but the reward is also promising. For instance, if you have experience in trading you can go from some hundred bucks to a hundred thousand or maybe millions and that’s why these contests are held.
To make your first forex trade, follow these four steps.
Now that you have a better understanding of forex, let’s look at how to place your first trade. Before you start trading, there are a few things you should do.
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Pick a currency pair to trade.
When you trade forex, you’re swapping one currency for another. To put it another way, you will always buy one currency while selling another. You will always trade currencies in pairs as a result of this. Most new traders will begin by trading the most popular major currency pairs, however you can trade any currency pair we offer as long as you have sufficient funds in your account. We’ll look at EUR/USD (Euro/US Dollar) in this tutorial.
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Research the market
The cornerstone of your trading attempts should be research and analysis. You’re operating on emotion if you don’t have these. This isn’t usually a good thing to do. When you initially begin your investigation, you’ll come across a plethora of forex resources, which might be daunting. However, as you explore a certain currency pair, you’ll come across helpful resources that stick out. You should review current and historical charts on a regular basis, keep an eye on the news for economic announcements, check indicators, and conduct other technical and fundamental analysis. Later on, we’ll go over various forms of research in greater detail.
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Study the quotation.
You’ll note that there are two prices for currency pairings shown. A EUR/USD quote, for example, might look like this.
The first rate (1.07173) is the price at which the currency pair can be sold. The second rate (1.07191) is the price at which the currency pair can be purchased. The spread is the difference between the first and second rate. This is the fee a dealer charges to complete a transaction.
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Decide on your position.
If you’ve ever traded stocks, bonds, or other financial instruments, you’re well aware that you can usually only speculate in one direction: up. Forex trading is a unique experience. You can speculate on market up and down movements because you are purchasing one currency and selling another at the same time.
A BUY POSITION is one in which you expect the value of the base currency will grow in relation to the quote currency. When you buy EUR/USD, you’re betting on the euro strengthening versus the dollar. To put it another way, you feel the euro is on the rise (and the US dollar is bearish).
If you take a SELL OPTION, you believe that the base currency will deprecate in relation to the quote currency. If you sell EUR/USD, you believe the euro will fall in value against the dollar. To put it another way, you feel the euro is headed for a decline.
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