Understanding the basics of forex trading

[Nite]

The purchase and sale of different currencies aiming for a profit is what Forex trading, also known as FX trading, is about. Basically, forex trading involves predicting how the value of a pair of currencies will change. For example, if a trader thinks that the Euro is going to get stronger against the U.S. Dollar, they might buy Euros using Dollars. Assuming that indeed the Euro’s value rises in relation to the Dollar (EUR/USD rate), they can then sell their Euros back for more Dollars than they had spent initially hence making profit. Forex trading has got a lot liquidity which helps in trading many currencies but hardly changes their value. Another thing is that traders are able to grow their positions by using little capital contrary to what one would expect.

 

[FXOchartist]

How to make a profit in forex is very easy in theory, traders just buy at low and close at high or vice versa, sell at high and close at low. However, in practice it is not as easy as in theory, traders must understand how prices change, and what factors drive a price to change up or down. Thus, forex trading is not just buying and selling relying on luck.

 

[moonchild]

Understanding the basics of forex trading is very important without understandin the basics there isn't much you can do and your learning will be greatly impaired, the good news is, these days trading knowledge is democratized, you do not have to pay anyone to learn, the knowledge is free and in the open, you can learn from Babypips or YouTube.

After learning you'll have to go get a mentor becasue it is way easier to be profitable if you have a mentor, and it is advisable to get a mentor where you live so that you can learn directly under him instead of virtually.

 

[FinTrader]

To be able to make money on Forex, we need to know not only the basics of trading, we must be strong in technical and fundamental analysis. Fundamental data directly influences the direction of price movement in a medium-term or long-term trend, and thanks to knowledge of technical analysis, we can find profitable entry and exit points into the market.