The Forex market is undoubtedly the largest liquid market in the world, with a daily transaction of $ 5 billion.
All transactions take place in a market where operators trade and speculate on currencies.
Here are 4 tips hallucinating for beginners in forex trading-
There is a wealth of information for those who wish to engage in forex trading. You must understand all the financial market: there is no free lunch.
Take time to learn about Forex trading, assets trading hours, risk management, and more.
Maybe you should start with the main concepts such as parasites, the base currencies and cross-currency. You should also pay special attention to the fundamental and technical analysis.
Fundamental analysis involves analyzing high-impact information such as the ECB, the FOMC, interest rates and more. Moreover, technical analysis is to predict market trends and learn how to use indicators.
If you understand the patterns of the previous market, you can predict the future trajectory of prices.
2. Choosing the Best Forex Broker
Since there is no central market in Forex trading, traders need to choose a Forex broker to help them execute transactions. Unfortunately, sift through large brokers can be an overwhelming task. Here are five considerations to take into account when choosing the best Forex brokers for beginners.
Since there is no centralized body regulating the foreign exchange market, a broker must be subject to strict regulation. This ensures that it is in the best interest and complies with high commercial standards.
If you are a novice trader, you need to check if the broker has satisfied all regulatory requirements.
In the US, the main regulators are the SEC, CFTC and NFA. Depending on the region, you will find other regulators such as the CFA, CySec FMA FSA.
A reputable dealer should put the name of the controller somewhere on the site. Remember, brokers must keep client funds in separate accounts. You do not want to give your money to someone who is not legitimate.
The broker must provide different types of accounts to meet your needs. Most of them offer micro accounts, mini and standard accounts with varying initial investment.
Some accept as little as $ 50 In general, the brokers charge a small commission (spread) which is the difference between the bid price and the asking price.
Avoid brokers who claim not to charge commissions because they tend to widen their spreads during high impact information.
Another area you should look at is the easy deposits and withdrawals. Many accept different payment systems such as credit cards, Moneybookers, Neteller, bank transfers etc. A small fee may apply for deposits and withdrawals.
Finally, you should consider the leverage and margin. A high leverage allows an operator to open large positions in borrowed funds. And depending on the size of your account, you can choose a leverage of 50: 1, 200: 1 or 400: 1.
Many brokers offer unlimited leverage to encourage traders to open large positions. Use leverage with care as it can work for or against you.
Free currency pairs
Currencies are divided into majors and cross currencies. The main currencies are EUR / USD, GBP / USD, USD / CHF, AUD / CAD, NZD / USD, USD / CAD and USD / JPY.
These currency pairs have small differences and are more volatile. cross-currency include, among others, the EUR / GBP, EUR / CHF, GBP / NZD, AUD / GBP. When choosing the best broker, you should see the wide selection of pairs offered.
A forex broker should offer 24/5 or 24/7 customer service. There are several ways to contact the customer service. The broker must provide various communication channels such as email, live chat or a phone number.
Start with a simple call to estimate the time needed to respond. Specifically, attention to how representatives answer questions on trading accounts, spreads, leverage and general company information.
3.Understand Forex trading sessions
Now that you are about to start your trading career, you need to know the best time to trade. While the market is open 24 hours a day, investors can trade during the day or night.
The foreign exchange market has three main trading sessions, so you can choose one that suits you best. Let’s do it quick!
Here are the deets …
After trading opens on Sunday, the Asian market is the first to watch the action. It works 23: 00 to 0800 GMT, reaching countries such as Japan, Singapore, Sydney and Hong Kong. During this period, about 20% of all foreign exchange transactions are made.
Liquidity is thin if there was a huge movement in the New York session.
Note: Japan economic news, Australia and New Zealand can affect pairs with AUD, JPY and NZD.
It is considered the Forex Capital and runs 8: 00-16: 00 GMT. During this period, over 30% of all exchange transactions are made.
When you trade in London, you can take advantage of low spreads and high liquidity. Towards the end of the session, the market tends to be reversed, with traders taking profits.
New York Session
After the London traders left lunch New York session starts (13h00-21h00 GMT). An estimated 20% of all foreign exchange transactions occur during this period.
Liquidity is high for all the currency pairs with the US dollar. It should be mentioned that this session coincides with the London session.
So what is the best time to trade?
The beauty of Forex is that you can negotiate on your knowledge, your personality and your risk tolerance. If you want to make the most of the market you should trade when a session overlaps the other.
But if you have little appetite for risk, you must exchange during the session in Asia. Remember that the time does not mean that you will be profitable.
First, you need to be in the right frame of mind. If you move, you can easily spend your hard earned money on a single company. Second, make sure the time you choose aligns with your trading strategy.
And this is something that you should do Definitely.
4.Ouvrez a trading account
Before opening a trading account, be sure to evaluate your level of experience. As a beginner, you must use your skills without risk of losing money. Most Forex brokers provide a demo account where you can practice with virtual money.
And once you’re ready to start, visit the broker’s website and evaluate the types of accounts available. Follow the instructions and submit the documents in accordance with regulatory requirements.
When the account is ready, you can fund with real money.
Forex trading is not a rich ploy. If you are a novice trader, you need to practice good risk management to increase your chances of success. Also, stick to your trading strategy and choose your broker wisely.
Make sure to follow the guidelines above before beginning to negotiate. Good luck.