How to start trading in the Forex market?
How to declare money and money incentives individually? One of the best advantages of FOREX Trading is
The amount you need to place a trade (called “margin”) is all you can lose!
You should know that despite the high leverage that some Forex brokers offer up to (400:1); (meaning if you deposit $1,000, the broker will allow you to trade as if you actually had $400,000).
Forex trading is less risky than trading stocks or futures, as you can lose more than what you have deposited in your account. This type of LEVERAGE does not exist in stock markets or futures
In the stock market or in the future, often, sudden and dangerous movements occur, which you cannot protect yourself, even if you put your protective stop.
Your position may be compromised with losses, and you will be responsible for any failure caused by the account. But due to the high liquidity of the forex market and the continuous round-the-clock trading, the risky trading space and the movement of the stock are almost eliminated.
It is done very quickly, without any omissions or partial executions. And finally, there is no limit to the number of calls. For your safety, the broker will automatically close some or all of your positions if your account balance falls below the level required to hold the position. Think of it as a last resort, automatically, always working for you to avoid a debit balance.
Coins are sold in dollars called “LOTS”
In Forex trading, and with most traders, you have a choice between two different weights. Small batches or small batches.
One standard lot is worth $100,000 in cash. The limit requirement, using 400:1 leverage would be US$250, that is, you control $100,000 in profit for only US$250.
You mean by investing $250 with a broker I can trade $100,000 of money??? No, note that your account size must be the required limit of 250 US. For example, if you place an order to buy 1 standard lot ($100,000) of USD/JPY and USD/JPY is quoted at 112.10/112.13, you buy USD/JPY at 112.13. Your account balance will be $220 because you paid 3 pips or $30 for this trade.
If you close this trade immediately, you must sell it at 112.10 (the price point), for a loss of $30. Of course, you cannot be killed in this trade, because the brokers will reject your order, due to the lack of sufficient funds in your account).
So, your account balance must be at least $280. $250 for shares and $30 for trades.
BUT …. IF, when you start the market to buy USD / JPY at 112.13, and USD / JPY falls the next second by 1 pip (approx. $8), your position will be closed automatically, due to a short limit.
I will explain later how you can get enough account size to trade in the Forex market. Currency is always traded in pairs in FOREX. A pair has a special label that shows the amount that is being sold. Symbols for money paths will always be in ABC/DEF format. ABC/DEF is not a real money path, it is a symbol for a money path. In this example, ABC is the country’s currency symbol and DEF is another country’s currency symbol.
Some of the most commonly used Forex indicators are:
USD – US dollars
EUR – Currency of the European Union “EURO”
GBP – British Pound or USB
JPY – Japanese yen
CHF – Swiss Franc
AUD – Australian dollar
CAD – Canadian dollar
There are also signs for other currencies, but these are usually commercial. Money itself cannot be changed. So you cannot trade USD by itself. You must buy one currency and sell another currency in order to trade.
Some of the most common currency pairs are:
EUR / USD The Euro against the US dollar
USD/JPY US Dollar and Japanese Yen
GBP/USD The pound sterling against the US dollar
USD/CAD US Dollar vs Canadian Dollar
AUD/USD Australian Dollar vs US Dollar
USD/CHF US dollar vs Swiss franc
EUR/JPY The Euro against the Japanese Yen
Money to the left of / is called capital. The currency of / is called counter-currency.
When you place an order to buy EUR/USD, for example, you are buying EUR and selling USD. If you were to sell both pairs, you would sell EUR and buy USD. So if you buy or sell a currency pair, you are buying/selling a base currency. The best way to remember this is to simply consider all investment options as one.
If you buy it… you buy the first currency and sell the second. If you sell it… you sell the first currency and buy the second one.