If you already have some background on the Forex Market, it's time to make the first trade, for that there are 4 important steps.
This is precisely what we are going to talk about today…
1. Select a currency pair.
The nature of forex trading is to exchange value from one currency to another. In other words, you will buy one coin while selling another at the same time. Because of this, it will trade a currency pair. Most new traders start trading major currency pairs, but you can trade any currency pair you want as long as you have enough money in your account. For this walkthrough, let's see
the EUR / USD.
2. Analyze the Market
Research and analysis should be the basis for your trading. Without these, it's
operated largely by emotion, it usually doesn't end well. When you start researching, you will find a wide variety of resources on the Forex Market - which may seem too much at first. But if you search for a particular currency, you'll find valuable resources that stand out from the rest. You should regularly view current and historical graphs, monitor economic news, announcements, consult indicators and perform other analysis activities.
3. Read the quotes
Note two prices displayed for all currency pairs. For example, when looking for EUR / USD you will see something like this:
The first rate (1,13678) is the price at which you can sell the currency pair. The second rate (1,13668) is the price at which you can buy the currency pair. The difference between the first and second rates is called spread. This is the amount of charges a dealer will have to trade.
4. Choose your position
If you have traded stocks, bonds or other financial products, you know that you can only speculate in one direction of the market - above. In the Forex Market is a little different. Because you are buying one currency while selling another at the same time, you can therefore speculate on the up and down market movement.
It believes that the value of the base currency will increase compared to the quote currency. If you are buying EUR / USD, you believe the euro price will strengthen against the dollar. In other words, it believes the euro is optimistic (and the US dollar will go down).
POSITION OF SALE
It believes that the value of the base currency will fall compared to the quote currency. If you are selling EUR / USD, you believe that the price of the euro will weaken against the dollar. In other words, it believes that the euro will go down (and that the US dollar will go up).