Playing forex unlike most financial markets, OTC forex market. Playing Forex without a place or an exchange center, trading 24 hours a day through a global network of businesses, banks and individuals. This means that currency prices continually fluctuate in value with each other, offering many trading opportunities. The simplest way to play forex is that you can speculate on the future currency direction, on BUY or SELL orders depending on whether you think the monetary value will increase or decrease. However, how beginners play forex, please follow the article below.
Step 1: Choose a currency pair
After selecting a suitable broker and opening an account successfully, you need to decide which currency pair you want to trade to officially start playing forex. Usually, a reputable broker will provide about 10 most common currency pairs or more to choose. Choosing a currency pair that suits your trading style is very important.
Step 2: Decide BUY or SELL
After you’ve selected the currency pair you want to trade and find an opportunity to enter the appropriate order, you need to place the order in the trading platform. The forex pairs have the appearance of 2 currencies, the currency preceded by the base currency, always with unit 1 and the currency behind it is the valuation currency. Simply put, when trading foreign currencies, you will:
BUY a currency pair if you believe that the base currency (front) will appreciate against the quote currency, or the quote currency (second) will weaken against the base currency.
- Your profit will increase corresponding to each price increase, you will have a certain profit when closing the order at the time the price is higher than the entry level or increasing the stop loss level higher than the entry price.
- If the price falls below your entry price, you will lose money until you close the order or wait for the price to rise again.
SELL a currency pair if you believe that the base currency will weaken in value against the base currency, or the quote currency will appreciate against the base currency.
- Your profit will increase whenever the price falls below the entry level.
- Every time you raise the price above your open position, you will be at a loss.
Each currency pair has two prices: the first is the selling price (called the bid – bid) and the second is the bid (also known as the ask price – ask). The difference between the bid and ask price is called the spread, and is basically the transaction cost.
Step 3. Add automated orders (take profit, stop loss)
An automated order is a guide to automatically trade at a future time when the price reaches a specific level predefined by you. You can use stop loss and take profit orders to help ensure that you are closing an expected profit and minimizing the risk when the trade goes against your wishes.
Although not required, due to fluctuations in the foreign exchange market, the use and understanding of risk management tools such as stop loss orders are essential.
- A stop loss order is a guide to close a trade at a price lower than the entry price, pre-set and used to help minimize losses.
- A take profit order is a guide to close a trade at a price higher than the entry price, is pre-set and is used to close the order when the price targets are reached.
Step 4. Track and close your transaction
After opening an order, your trade will make a profit or loss with every move of the market price.
You can monitor market prices, view unrealized gains / losses in real time (Equity), change profit taking, stop loss and add new trades or close existing trades from your computer or Your application on smartphones and tablets.
Step 5. Finish your transaction
If you do not want your trade to end with auto-take profit or stop loss orders, you can close your trade immediately. After closing the trade, your profit and loss will be added to the cash balance in your account.
The above is a guide on how to play forex you will execute on any trading platform. With this article on how to play forex for beginners, hope you can easily start playing forex.
Synthesized by top4forexbrokers.net