Forex Trading basics.
In simple terms Forex Trading means foriegn currency trading
Trading of Forex is not suitable for all. becuse beside of its reward it is risky too(do not invest more than you are affordable to loose). especially below 18 aged are strictly prohibited.
any trading weather it is forex comodity index or shares, is based upon a simple rule of buy low and sell at high to make proffit.
Instead like share a position in forex is defined in choosing a pair, not single,
for example buy Euro/Usd (Euro Vs Dollar)means Euro is purchased in terms of Us dollar. similerly sell GBP/JPY means grate briten pound(sterling) sold (or yen purchased interms of gbp)
an index of ratio of a pair is called its market price.
for example Euro/Usd=1.3350 means ratio of euro/usd =1.3350
in simple word it indicate 1 Euro= 1.3350 dollar.
Long and Short
openingan a position (exicuted order) is entry and closing is called exit.
if entry is buy it is called long, and if entry is sell that position called short
Two types of transactions are general 1)open a position from buy first and close with sell (called Long)
or 2)open sell and close with buy(Called as Short).
Type of Orders
mainly three types of orders 1)spot order 2)limit order and stop order
each explained briefly
1)spot or instant order is nothing but buy or sell at current(market) price.
spot order is immidiate, or instant order. other types are called pending orders.
buy at lower than current price is limit long. for example current price of Euro/usd is 1.3350
a limit order should be lower than that value ie it may be 1.3320 when market value decrease to 1.3320 order will exicute
and position will be opened
similerly Sell at higher than current price is called Limit short
Limit orders are pending orders they will not exicute untill quoted price will come.
3)Stop order is a pending order in which a long is opened at higher price than market price.
and a short at lower than market price.
this type of order is usefull if a trader decide to open a position after realisation of direction of market
here given an example of stop order: let market price of Euro/Usd is 1.3350 putting a spot buy at 1.3375 is exicuted only if market moves upward to 1.3375
this type of order is proffitable if trader knows market moves further in same direction.
a diference between buy and sell at a point of time or difference between ask and bid price is called spread
spread is nothing but a broker's comission in (pip)points
for example spread of a broaker for Euro/Usd is 2 means if market price of euro is 1.3350 broker shows ask price at 1.3351 while bid price at 1.3349
in simple words broker buy from you at 1.3349 while sell it for1.3351 at that instance of time.
Take Profit and Stop Loss(T/P and S/L)
T P is(also known as Target point) ment to Close the position in Profit
S/L is Instrument(Script) to Close Position in Loss to Prevent Further Loss!
Flatform (Trading Aplication/software)
An aplication which is used for trading between Broker and Trader
it manages exchange of pivot signal flow towards clint terminal, and order/ requests flow towards broker side
Want to Enter Forex Market?
Here Are Step by Step Instructions To Setup A Trading Account
You Need to make two type of account
Banker Account and Trader Account
!)A Banker Account(Online Payment Processor)To Make Investment and withdrawal
One Most Popular Payment Processor is Liberty reserve
Free to make account 1% comission fee for inward flow of Money(Recieving)
Clik Here To Make An account in libertyreserve
hit Create New account,
Fill out the form and Save your passwords(3 No.) to a safe location'(It will be shown Only Once)
Your Account number will be sent to your Email.
Login using passwords and compleat second step of registration.
Now You are ready to Invest and withdraw Money(in dollars)
2) To Make A Trading Account
Making an account is free. commissin are charged only for positions (spread)
Hit above Icon and clik Create new account...confused ? (To go directly to make account page)............ Click Here
Fill Form and set swap free
set account option to standerd(default)
All account information(Id and Password) forwarded to Your Mobile phone
Now your trading account ready.
Now Download Flatform
Setup donloded file(which is Terminal/Flatform)
Login to Clint Cabinet of instaforex(website) and deposit (min deposit is $1)
Login to trading terminal and your deposited amount should appear there
now you are ready to trade!
Golden Rules to prevent Loss
Most of new traders will end up their starting in loss because of lack of knowledge about Safe trading
Here are some rules of safty
Do not Trade Big lots(like $1)
trade little quantity like 0.01(100 minilot in leverage 1:100) in metatrader in beginning
avoid too many positions only few with distance of atleast 50 point
set stoploss of atleast 50 point to rescue from havvy loss
always check weather your fund can with stand up to 300 point opposite move?
Be alert about News (http://www.forexfactory.com/calendar.php)
study technical analysis (www.forexstreet.com)
Trade lower volatile /spread pairs in beginning(Euro/Usd, Gbp/Usd)
Avoid high volatile pairs at begginner stage (Gbp/Jpy, Euro/Jpy)
Be ride safe and don't be a loser
Knowledge skill and strategy
Why most Traders Loose their Money? rather than gain?
many reasons let us discuss few here
1)wrong choice of broker
2)wrong style of trading
3)Lack of skill and strategy
4)Too high expectations
let us discuss one by one
1)If you need to win you have to choose a good broker it is a fundemental step. a wrong choice will always end up in blow of your fund, or un managable hedge, were profit remains as dream only.
why this happens? majority of brokers will play against traders! via dealing desk. and more interested in client's money than spread(comission) every dealing desk broker will gain profit if his client loose money your orders will not reach interbank quotes directly and many case broker will play opposite to you and market moves opposite to your direction becos of countertrade. beter way is using ECN Brokers than dealing desk brokers but mejourity of ECN Brokers initial Deposit is within range of $5000 and LR deposit is hard to see as a funding way.
After enough search We are suggesting a Cool (Semi)ECN broker who Accept LR to deposit and withdraw here
Try this ECN broker