Forex Trading Basics Everyone Should Know
In this article, we cover the forex trading basics you should know if you’ve decided you’re going to open a live or demo trading account. The online currency trading market is the largest investment market in the world and continues to grow at a rapid pace. Online trading is a 24-hour market that is only closed from Friday evening to Sunday evening. There are three main sessions; the European, Asian, and United States trading sessions.
It is relatively easy to start trading, but it can be very difficult to become good and successful at it without proper guidance. The benefits of online trading have made accessible to everyone but not everyone is successful. According to statistics, about 90% of traders fail within their first year of trading! This showcases the importance of proper guidance, which we gladly provide, in order to successfully navigate through the trading waters.
Here are the essential Forex trading basics every beginner should know.
Pairs and Pips
Currency Trading consists of pairs and pips. What does this mean? It’s not like the stock market, where you can buy or sell a single stock. You have to buy one currency and sell another currency in the online currency trading market. This will have to be done in pairs. With currency trading, it is priced out to the fourth decimal point.
A pip can also be called a percentage, which means that it is in point the smallest increment of trade. One pip typically equals 1/100 of 1 percent. Beginner traders often trade currency in micro lots, because one pip in a micro lot represents only a 10-cent move in the price.
What are the aspects that influence currency?
One of the biggest things that influence currency is “supply and demand”. Meaning that when the world needs more dollars, the value of the dollar increases and when there is too many circulating, the price drops.
There are other factors that will influence the markets like interest rates, new economic data from the largest countries and geopolitical tensions as well as unemployment rates. This is only a few of the events that may affect currency prices and one should stay up to date in order to trade effectively and efficiently.
Learning about currency online trading is easy but finding the winning strategies takes a lot of practice. The most important thing is to consult experts in the field and let them help you find the road to trading success.
Posted in Forex Trading