TRADING MADE EASY FOR BEGINNERS

Forex trading can be difficult when it comes to beginners due to unrealistic expectations among newcomers. But over time as one learns, the process will become second nature.

Below you can discover trading terminology for beginners:

Spot Forex: This type of forex involves selling and buying real currency. For instance you can purchase dollars for euros and once the value increases you can exchange the euros for dollars.

CFDs which stands for Contract for difference. This is used in a contract used to represent movement of prices in financial instruments. Which means you can take advantage of price movements without having to purchasing and selling large currency. CFDs are available in bonds, commodities, cryptocurrencies as well as indices. In these cases you are permitted to trade in the movements of these without having to buy them.

Pip: This is a base unit in the price of a currency pair.

Spread: This is the difference between the sale and purchase price of a currency pair. Most of the popular currency pairs are low and sometimes less that a pip. The spread is generally higher for pairs that do not trade often. The value of the currency pair must exceed the spread before the forex trade becomes profitable.

Margin: This is the money that is usually retained in the trading account which is opened by the trader. Forex Brokers offer clients access to leverage as the Retail Forex trader may lack necessary margins to trade at high volumes.

Leverage: Leverage is the capital provided by a Forex broker and is the ideal concept for beginners in order to increase the volume of trades, taken by customers.

Pricing and Quotes: When trading you will request ask and bid pricing. The asking price is that of which you can purchase currency. The Bid price is the one you can sell it for.

Long Trade: Purchasing a currency with expectations that the value will increase, and a profit would be made with the difference between the purchase and sale price.

Short Trade: When you sell a currency with expectations that the value decreases and you can purchase them back at lower values which benefits from the difference.

Chart Types: There are a variety of options available whereby line charts are used when viewing the exchange rate in live forex charts.

As a beginner trader, you need to take note of the wide range of forex trade strategies to choose from which include Currency Scalping, Intraday Trades and Swing Trading.

Currency Scalping is a trade which consists of buying and selling currency pairs.

Intraday Trades: Trading which would be the ideal trades for beginners.

Swing Trading: Is medium term trading which focuses on price movements, where traders can keep a trade open for a few days or weeks and is a good option for traders who trade as a complement to their

full-time work.

When the time comes to select a Broker, it is essential that you as a beginner trader studies the currencies of the trading software and platforms, they have available. You need to be able to trust your Broker and be open to discussing the results you expect. Ensure your funds will be protected.

In order to have independent account management, you need to select a platform that allows you to trade and handle your account independently.

Any Forex trading platform should allow you to manage your trades and your account independently, without having to ask your broker to take action on your behalf. This ensures that you can act as soon as the market moves, capitalize on opportunities as they arise and control any open position.

There are risks all beginner traders need to keep in mind such as leverage risk whereby trading can be positive or negative which can impact on the trading process.

The higher leverage, the higher the benefit of losses. Interest rate risks are the moments whereby the country’s interest rate rises, and this causes the currency to get stronger. However if the interest rate falls, your currency may weaken which can result in investors withdrawing their investments.