With a scale larger than the stock, gold, and commodity markets combined. The forex market attracts diverse participation from investors at all levels. Including individuals, businesses, investment funds, and central banks. If you are interested in exploring forex trading and want to be a part of this market. Learn Forex Trading will give you the most basic and detailed Forex beginner guide!
What is Forex Trade that has so many participants today?
Self-study Forex will guide you to discover the basics of the foreign exchange market. What is forex trade that this market trades billions of dollars every day? You will be explained how the markets work, as well as the basic steps you need to take to become a forex trader to get started.
Interesting information about forex trading
Forex is short for Foreign Exchange (or FX), synonymous with international currency exchange. Simply, this is the process of converting two currencies from two different countries, carried out at an agreed exchange rate.
Forex trading is commonly known as “foreign exchange trading” and is the largest financial market globally. Operating continuously 24 hours a day from Monday to Friday every week. The market movement started on the Wellington exchange and continued through the New Zealand, Tokyo, Singapore, and London exchanges, and ended on the New York exchange at the end of Friday.
The value of the foreign currency market is much greater than that of conventional stock exchanges. For example, the New York Stock Exchange trades about 26 billion USD per day. At this time, the Forex market reached 5,100 billion USD.
This difference is caused by the fact that the Forex market is where the exchange and buying activities of all countries around the world gather. Participating partners include the Central Bank, large trading companies, financial funds, and individuals participating in forex trading (traders).
See more: How to forex experience to trade successfully
Forex beginner guide basic steps
To participate in forex trading, you can refer to the basic and brief process on how to start forex trading for beginners as follows:
Step 1: Find a reputable forex broker.
Step 2: Register a forex account at the selected exchange.
Step 3: Download and log in to MT4 software (MetaTrader 4).
Step 4: Deposit money into your forex trade account.
Step 5: Choose a currency pair to place an order, then decide to close the order if there is a profit or loss.
Step 6: In case the transaction is profitable, you can withdraw money; If there is a loss, return to step 4 to continue the trading loop.
Forex beginner guide through trading software
Forex trading through trading software is a flexible and convenient process for investors.
Instructions for trading forex via the Metatrader platform
Here is a simple guide on how to execute trades on a trading software platform like MT4 (MetaTrader 4):
Step 1: Research and choose an exchange:
First of all, choose a reputable forex broker and register an account. So how to choose a reputable exchange, we can refer to below this article!
Step 2: Download and Install MT4 Software:
After choosing the appropriate exchange and registering. Download and install MT4 software from your browser, Appstore, or CH Play.
Proceed to log in to your Forex account via MT4.
Step 3: Deposit money into the exchange account of your choice:
Make a deposit to your trading account via supported payment methods. In this step, depending on the platform you choose, there will be different loading methods and ports.
Step 4: Understand the MT4 Interface:
Learn about the MT4 interface, including price charts, currency pairs, and technical analysis tools. You should research on your computer to learn more about MT4 when trading forex.
Step 5: Choose a currency pair and open an order:
Select the currency pair to trade and decide to open a buy (long) or sell (short) order based on your analysis.
Step 6: Manage risk and profit:
Set Stop Loss and Take Profit levels to manage risk and profit in your trading.
Step 7: Monitor and close orders:
Monitor the charts and markets, adjust orders if necessary, and decide when to close orders to take profits or minimize losses.
Step 8: Withdraw Money (if profitable):
If there is profit, go through the process of withdrawing funds from your account from the trading platform account.
Choose a reputable broker to trade forex
We execute buy and sell orders on the market through the intermediation of a broker. For the best trading experience, choosing a trustworthy broker is important.
A good broker usually has trading products that suit your needs, offers reasonable trading fees and leverage, has a reputation that has been built over time and is closely monitored by regulatory agencies. quality management agency. Some of the most reputable and safe brokers in UK that Learn Forex Trading would like to introduce best forex trading platform.
forex beginner guide via a demo account
A demo account, or virtual account, is a valuable tool that helps you get acquainted with the trading process without taking any risks. In the demo account, you will be provided with some virtual money to perform trading operations. Just like on a real account, but without worrying about financial loss.
This is a great opportunity for you to familiarize yourself with aspects of the market. Now you can build your trading strategy. You can test different strategies to trade forex. Understand how currency pairs work. Practice risk management skills without fear of affecting personal finances.
Learn Forex Trading recommends using a demo account for the next steps of your trading journey. This helps you gain experience and confidence before starting to trade on a real account. Improve your decision-making ability and optimize your trading performance.
See more: Registering XM broker account on the phone
forex beginner guide to be able to place orders successfully
Self-study Forex has compiled and drawn out the forex experiences that the most successful traders are applying. Let’s follow along to help new traders identify risks and appropriate investment methods!
Choose currency pairs when deciding to Trade forex
Each currency pair is represented by combining the names of two currencies, for example, EUR/USD. The symbol of each pair usually consists of three letters, with the first two letters representing the country and the last letter standing for the currency, for example, USD is the United States Dollar.
The meaning of currency pairs represents the exchange rate between two currencies. For example, EUR/USD 1.20 means one Euro is worth 1.20 US Dollars. Quotes usually display two numbers, the buy price and the sell price. The asking price is the price you pay when you buy the base currency, and the asking price is the price you receive when you sell it.
Distinguishing Currency pairs: Major, Minor, and Cross:
Major Currency Pairs:
A currency pair that includes the US Dollar (USD), for example: EUR/USD, USD/JPY. These are the most traded currency pairs in the world.
Minor Currency Pairs (Or Group Currency Pairs):
These are currency pairs without USD, such as EUR/GBP, and EUR/AUD. Usually has lower liquidity than major currency pairs.
Cross Currency Pairs – called Cross Currency:
These are pairs that do not contain USD, for example: EUR/GBP, AUD/JPY. Often requires more analysis since there is no common currency to compare prices.
Main factors that affect currency exchange rates:
Economic Situation:
GDP is a factor that affects currency exchange rates. As well as inflation and the labor market are also major factors.
Politics:
Political and economic issues and instability are also matters of concern.
Financial Markets:
Volatility, liquidity, and market sentiment.
International Factor:
Global events and impacts from major markets.
When starting out, you should focus on researching 1-2 major currency pairs to build in-depth knowledge and confidence in the trading process.
Analyze the market to find a trading opportunity
To find trading opportunities in the market, you need to carefully analyze the market and have a strict strategy.
- Fundamental Analysis:
Global economy:
Track global economic indicators such as GDP, inflation, and labor market conditions. These factors are what can affect currency values.
Politics and Economic Events:
Political events, international trade contracts, and major events can create strong fluctuations in the market.
- Technical Analysis:
Price Chart:
Use price charts to identify trends, support, and resistance levels, and technical patterns.
Technical Indicators:
Use indicators such as MACD, RSI, and Stochastic to evaluate the strength of a trend and make trading decisions.
- Market Analysis:
Competitors and Opportunities:
Monitor competitor developments and new market opportunities.
SWOT Analysis:
Determine the Strengths, Weaknesses, Opportunities, and Threats of the currency pair you are interested in.
- Understanding Short-Term and Long-Term Factors:
Short-term:
Face short-term factors like daily economic data, upcoming events, and announcements.
Long-term:
Look further ahead to factors such as long-term trends, major trade deals, and global economic policy.
Trade forex by entering buy or sell orders
Trade forex involves opening orders to buy or sell currency pairs. You choose a currency pair, decide to buy if you predict the price will increase, and sell if you predict a decrease. Determine position size and leverage, then set Stop Loss and Take Profit levels to manage risk and profits.
Monitor the market and adjust the order as necessary, then close the order when the target or decision is reached. Forex trading requires extensive knowledge and careful strategy. Start small and use a demo account to practice your skills before real trading.
Conclude
In the article on Learn Forex Trading, there is a forex beginner guide for beginners to participate in the foreign exchange market. The most important thing is to master basic concepts such as currency pairs, buy/sell orders, leverage and Stop Loss and Take Profit levels, etc. to be able to get familiar with trading.
FAQ
Why do you need to use a demo account when starting to trade forex?
Demo accounts help hone trading skills and understand the market without financial risks.
How to choose a broker for forex trading?
Choose a broker based on reviews, feedback, licenses, customer support, and costs to ensure a safe and efficient trading environment.
How to manage risk when trading forex?
Manage risk by using Stop Loss, Take Profit levels, determining appropriate position size, and applying a careful leverage strategy.
