Forex Currency Trading Tutorial - Outlining The Basics For You
Currency trading tutorials can introduce you to some of the basic issues you will need to understand before you begin actually trading on the Forex. Expanded study is highly recommended in order to develop a deeper understanding of the topics discussed here.
Open an account with a currency broker and deposit funnds. Be aware that the level of money you will be trading will be higher than your initial deposit. This is because brokers will allow you to borrow a large portion of the capital you will trade. It is important to keep in mind the amount of leverage you are using so you can manage your exposure to risk.
Currencies will always trade in pairs. One currency is matched up against another. The EUR/USD(the euro and dollar)trade as a pair. The GBP/USD(the pound and dollar) are paired. The USD/JPY(dollar and yen) trade as a pair and the USD/CHF(dollar and Swiss franc) are matched together.
The first currency in the pair is the base currency. The second one is the quote currency. The base currency is purchased with the quote currency. If the price is listed as 1.63 USD/CHF, it means that one dollar can be purchased for 1.63 francs. Another example is 1.46 EUR/USD, which means that one euro can be purchased for $1.46.
You will see two prices for a currency. One price is for the bid and one is for the asking price. The bid is what you receive if you are selling the contract. The asking price is what you would need to pay the broker to purchase the currency. The spread between the prices is the broker's commission.
Making money while trading currencies can be a difficult task. There are many factors to analyse when making buy and sell decisions. If you think prices on the Swiss franc are going to drop, you would buy the USD/CHF and hope to sell in the future after the franc has dropped against the dollar. Selecting the way the market will move depends on technical as well as fundamental issues. However, after you have a good idea of the future direction, the famous saying "buy low and sell high." Is the objective. Another exercise that will bring profits is to sell high and buy back the currency in the near term to cover the open position.
If there is one thing you take away from this currency trading tutorial it should be that you need to become an expert in two areas. The first one is to become an expert in technical analysis. Nearly all traders use this tool to help them make their trading decisions so it is very important that you use it also. There are excellent books on technical analysis, as well as high quality classes taught be experienced traders. Technical analysis will help you identify price trends and changes that are developing in those trends. This will help in making decisions to buy or sell and when. You will learn to set stop-loss-orders to limit your risk exposure. When you combine this technical analysis with fundamental analysis you are in a position to make the best decisions. Fundamental factors have a day to day affect on prices and technical analysis can help you see how these factors have moved prices in the past. Past behavior can help predict future behavior.
This currency trading tutorial should be only the first step you take in preparing for a future in the market. Competion is heavy so make sure you are prepared to meet your competion head-on. - 23199
Open an account with a currency broker and deposit funnds. Be aware that the level of money you will be trading will be higher than your initial deposit. This is because brokers will allow you to borrow a large portion of the capital you will trade. It is important to keep in mind the amount of leverage you are using so you can manage your exposure to risk.
Currencies will always trade in pairs. One currency is matched up against another. The EUR/USD(the euro and dollar)trade as a pair. The GBP/USD(the pound and dollar) are paired. The USD/JPY(dollar and yen) trade as a pair and the USD/CHF(dollar and Swiss franc) are matched together.
The first currency in the pair is the base currency. The second one is the quote currency. The base currency is purchased with the quote currency. If the price is listed as 1.63 USD/CHF, it means that one dollar can be purchased for 1.63 francs. Another example is 1.46 EUR/USD, which means that one euro can be purchased for $1.46.
You will see two prices for a currency. One price is for the bid and one is for the asking price. The bid is what you receive if you are selling the contract. The asking price is what you would need to pay the broker to purchase the currency. The spread between the prices is the broker's commission.
Making money while trading currencies can be a difficult task. There are many factors to analyse when making buy and sell decisions. If you think prices on the Swiss franc are going to drop, you would buy the USD/CHF and hope to sell in the future after the franc has dropped against the dollar. Selecting the way the market will move depends on technical as well as fundamental issues. However, after you have a good idea of the future direction, the famous saying "buy low and sell high." Is the objective. Another exercise that will bring profits is to sell high and buy back the currency in the near term to cover the open position.
If there is one thing you take away from this currency trading tutorial it should be that you need to become an expert in two areas. The first one is to become an expert in technical analysis. Nearly all traders use this tool to help them make their trading decisions so it is very important that you use it also. There are excellent books on technical analysis, as well as high quality classes taught be experienced traders. Technical analysis will help you identify price trends and changes that are developing in those trends. This will help in making decisions to buy or sell and when. You will learn to set stop-loss-orders to limit your risk exposure. When you combine this technical analysis with fundamental analysis you are in a position to make the best decisions. Fundamental factors have a day to day affect on prices and technical analysis can help you see how these factors have moved prices in the past. Past behavior can help predict future behavior.
This currency trading tutorial should be only the first step you take in preparing for a future in the market. Competion is heavy so make sure you are prepared to meet your competion head-on. - 23199
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Be SURE to read up on a currency trading tutorial before you learn international currency trading!
posted by X - Men @ 2:03 AM
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