We know it may sound complicated, but nowadays you can actually trade forex online from anywhere you want by simply using your own computer, smartphone or tablet.
we want to walk you through and to show you exactly how you can trade forex online, it is easier than you think.
Let’s begin with some simple terms that you must understand before trading……
Forex Trading Terminology
- Currency Pair – currency pair will be written as XXX/YYY. The base currency is the currency on the left-hand side (XXX), and the quote currency is the currency on the right-hand side (YYY). We will always trade on the base currency against the quote currency.
For example: EUR/USD – the base currency is the euro and the quote currency is the U.S. dollar.
- Pip – the change in value between two currency pairs is measured as a pip, usually, the pip will be equal to 0.0001.
For example: EUR/USD – if the currency rate will rise from 1.1942 to 1.1952 it’s mean that the currency rate has increased by 10 pip’s.
- Buy/Sell position – after you will decide which currency pair you want to trade on, you should decide either to Sell or either to Buy.
For example: EUR/USD – When a trader launches a BUY position, it’s mean that he buys euro and sell U.S. dollars at the same time. In that case, the base currency should gain value in contrast with the quote currency in order the trader will get profit. On the other case, the trader will launch a SELL position if he thinks that the euro will lose value in contrast with the U.S. dollar.
- Leverage – by simple words, leverage will give you the ability to trade on a bigger volume with the money that you invested.
For example: 1:100 leverage means that in order to trade on 10,000$ you should invest 100$, each 1$ worth 100$ trading volume.
Opening An Online Trading Account
Make your own research before opening a trading account with the broker, the main things you should check is:
- Regulation – the most important thing that needed to be checked. Depending on your nationality, These are the regulation you should look for.
Some major regulations are:
United States: Commodity Futures Trading Commission (CFTC).
United Kingdom: Financial Conduct Authority (FCA).
Cyprus: Cyprus Securities and Exchange (CySEC).
Australia: Australian Securities and Investment Commission (ASIC).
Germany: Federal Financial Supervisory Authority (BaFIN).
- Demo account – some brokers will offer a Free demo account that allows you to get more experience with the platform, In this account, the trades you open won’t be based on real money so you can gain experience and confidence trading.
- Experience – Brokerage with years of experience are better than new ones, years of activity shows that the brokerage is stable.
Verify Your Account and Start Trading
After opening an account with the broker you chose, it’s highly important to verify your account and submit the relevant documents, you are not allowed to trade or withdraw funds until the account is fully verified.
Place your order
- Set the trade volume.
- Decide which position to open, Sell or Buy.
(Optional)- Set up a Take profit/Stop loss command:
- Take profit – Ensures your trade will be automatically closed with profit, only if the currency pair market rate reaches the specific rate you chose.
- Stop loss – In case that your trade is going against you and you want to limit your losses, Stop loss ensure your trade will be automatically closed at the specific rate that you chose.
Track your open positions
You are able to check the open positions at any time you want, the forex market is volatile and remember that trading with leverage is a double-edged sword, it can go against you as well as with you.
Follow your trades and make sure to close your trade if the profit satisfies you or if the loss is too much for you.
Oh and a very important thing you should remember, Don’t Be Greedy!
In order to become an expert in online trading, you will need more information. In this article we will guide you through the simple way to start trading forex online, we will add more articles in order to help you gain knowledge.
Stay tuned and share your opinion by Commenting below, let us know if you found this article useful or if you have any questions.