There might be a saying in the market that Forex trading is a very easy job, but it is not true. A person who wants to make profitable beginners Forex trading should keep it in mind that it requires a lot of dedication, perfect amount of work, learning and practice.
In addition to this, money-making beginners Forex trading would also require a person to be a good disciplinarian, should have a good understanding about managing the money and a perfect knowledge about the currency market.
Know about Forex and its working before trading
Forex trading is the oldest and even the largest foreign exchange market which works on a 24-hour basis. Beginners Forex should make a person aware of the fact that it is a liquid form of market with an annual turnover of about 1.9 trillion USD. Beginners Forex would make a novice in this trading system aware of the fact that buying of one currency and selling of another currency is done in a simultaneous manner in the currency market of inter-bank. The currencies of the different countries of the world are always traded in the form of pairs in an exchange rate which is of balanced nature.
Beginners Forex should make a person aware that basically there are two distinct reasons for which such buying and selling of currencies are done. It has been estimated that 5% of the profit made in Forex trading comes on a daily basis from those companies and even governments that sell or buy their products or services in a foreign country.
On the other hand a person who wants to know more about Forex trading beginners Forex would offer the knowledge that the remaining 95% of profit making is done through the speculation method.
The trading of currencies in the market of Forex is not based on any kind of exchange system. But the currencies of different countries moves from one country to the other which would make Forex trading possible.
Pair of world currencies used for Forex Trading
If you are looking forward for a beginners Forex you should that there are some pair of currencies in which the trading is carried out and this include
- USD/CAD = US Dollar/Canadian Dollar
- USD/CHF = US Dollar/Swiss Franc
- EUR/USD = Euro/US Dollar
- NZD/USD = New Zealand Dollar/US Dollar
- AUD/USD = Australian Dollar/US Dollar
- GBP/USD = Pounds Sterling/US Dollar
- USD/JPY = US Dollar/Japanese Yen
How to read the Forex quote?
Beginners Forex should teach the way in which Forex quotes should be read. There are two numbers in a Forex quote. The beginners Forex should inform the person that the first number of the quote is known as the bid and the second number of the Forex quote is known as ask or offer.
If an example of USD/CAD is taken then the price offered by USD is the bid price. It is the price by which the Forex traders would be interested to buy USD against CAD. Beginners Forex should make one aware that the price offered by CAD is the offer price. It is the price in which the Forex traders would be prepared to sell the USD against CAD. The value of the base price is always taken to be 1.
Requirements of Forex trading
- The beginners Forex should make the learner of Forex trading aware that there are mainly two approaches like Forex fundamental analysis and Forex technical analysis.
- The beginners Forex require one to know that the trading needs a good broker.
- It is important to learn about the correct mechanism for managing the money in Forex trading. There are high levels of risk in Forex trading market. So a person should know about the right way to analyze and manage the risk.
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