Lesson 3 – How to Trade Forex?
In simple terms, when you trade forex (foreign exchange) you are buying on currency and selling another in exchange.
This happens at the same time, when you buy one, you sell another, at whatever price the market sets. Therefore, currencies in forex are always quoted in pairs.
Here are the top 5 by traded volume and great first ones to affiliate yourself with and to check inside your demo account, or your live account in case you’ve already gone and deposited.
Click here to open a demo account to practice with and familiarize yourself with everything in case you havent yet.
- Euro/US Dollar (EUR/USD)
- US Dollar/Japanese Yen (USD/JPY)
- British Pound/US Dollar (GBP/USD)
- US Dollar/Swiss Franc (USD/CHF)
- Australian Dollar/US Dollar (AUD/USD)
Now, these pairs will always fluctuate in price. And often, one can trace the price movement to a variety of factors. For example, if there is a particular political unrest in a certain country (Like BLM in the US, Brexit in the UK, Fires in Australia) then the value of their currency may fall.
This essentially is due to a reduction in demand for the goods and services in that country, and therefore its currency.
The forex market produces movements in all of the 100s of currency pairs. And these movements can be boiled down to either a fundamental or technical reason, which we will go into depth, further on in the course.
These price movements are where the opportunity is found, giving traders the chance to make profit by correctly forecasting the direction in which the price goes.
What do you need to trade forex?
Forex is especially welcome to anybody that wants to trade them. All you really need is some device, and an internet connection. And as soon as you want to do it for real, you’ll need some money to trade with.
Until then, you can practice with a demo account. Click here to open one, in case you haven’t yet to familiarize yourself with how everything works.
You can register live trading accounts and make real trades with as little as 10 Euro with some brokers. However, as with most things in life, the more you put in the more you get out.