Forex Trading

Transparency is essential to us at TradeMoneta. That is to say, our experience should be shared with you. That’s why we’ve toned down the jargon in order to provide you with an easy-to-understand, comprehensive introduction to Forex trading.

Forex Trading: An Introduction

When starting out in the Foreign Exchange market, it’s easy to feel intimidated by the eponymous title, which has a daily average turnover of more than $5 trillion (USD). Nevertheless, you don’t have to be intimidated by the eponymous title. If you’ve ever travelled abroad, there’s a good chance you’ve engaged in some kind of Forex trading. When you exchanged your hard-earned money for another currency, the rate of exchange was determined by the supply and demand of the two currencies, which determined how much you received in return. A Forex trading transaction is built on the relationship between the base (original) and counter (new) currencies.

Since currencies are traded on a free market, exchange rates in Forex trading are subject to ebbs and flows in supply and demand. As a result, the value of timing in a large oversea payment increases significantly on a larger scale, but don’t worry, you’ll start small and work your way up. For the time being, Forex trading can be broken down into two steps:

1.   Purchasing a currency with the expectation that its value will increase.

Or

2.   You’re selling a currency because you think its value is going to drop.

Before we begin building your Forex trading strategies, there are a few words you should become familiar with. Try to memorise the following Forex trading words as much as possible; they’ll come in handy:

Forex Trading Terms: Currency Pair

·        The RATE OF EXCHANGE between two CURRENCIES, such as GBP/USD=1.25.

·        This final number is known as ONE PRICE, and it means that 1 pound is exchanged for 1 dollar and 25 cents in this case.

Forex Trading Terms: Price Chart

·        The price chart depicts the CHANGE IN THE PRICE OF A CURRENCY OVER TIME.

·         The TIME will run along the BOTTOM of a price line, while the EXCHANGE RATE will run up the RIGHT.

price of a currency

Forex Trading Terms: Pips

PIPS are used to calculate price fluctuations in Forex trading since it is dependent on minute shifts in currency prices. This is the FOURTH number following the decimal, as in: 1.2525. If the value of a currency changes by.0001, it has moved by a SINGLE PIP. Now that we’ve cleared up some of the jargon, let’s look at some novice Forex trading strategies. Keep in mind, though, that Forex trading decisions are based on your own personal needs, and thus can only be made by you.

  • BrokerEUR/USD
    InterTrader 0.6pips (fixed) margin: 3.33%
    IG 0.6pips (fixed) margin: 3.33%
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