How to do Forex Trading?
Forex Trading. Unlike most financial markets, the OTC (over-the-counter) foreign exchange market has no physical location or central exchange and trade 24 hours a day through a global network of businesses, banks and individuals. This means that currency prices continue to fluctuate in value against each other, offering many trading opportunities.
At City Index, you can speculate about the direction of the currency in the future, whether in a long or short position depending on whether you think the currency will go up or down. The video below shows you how to trade EUR / USD currency pairs with CFDs.
1. Select a currency pair
Determine which currency pair you want to trade. With more than 65 currency pairs to choose from, choosing the right trading opportunity for you is important.
City Index's technical research tools and fundamentals can help you see currency trading opportunities that suit your trading style. We recommend that you take the time to understand the amount of price volatility associated with a currency pair to help manage your risk.
2. Determine the type of FX trading
There are three ways to trade forex with Barter Spread, CFD, or Forex Trading. Each has a certain bet size:
3. Decide to buy or sell
After you choose the market, you need to know the current price on the trade, which you can do by bringing an order ticket on the platform. All forex are quoted in one currency compared to other currencies. Each currency pair has a 'base' currency and 'bidding' currency. The base currency is the currency to the left of the currency pair and the quote currency on the right. Simply put, when trading foreign currencies, you will:
BUY a currency pair if you believe that the base currency will strengthen against the quote currency, or the quote currency will weaken against the base currency. Your profits will rise along with every increase in exchange rates. Every fall in the price of an exchange below your open level will make you lose.
SELL a currency pair if you believe that the base currency will weaken in value against the quote currency, or the quote currency will strengthen against the base currency. Your profits will increase as each exchange price point falls. Every increase in the price of an exchange above your open level will make you lose.
Spread - FX pairs have two prices.
The first price is the selling price (known as the bid) and the second price is the purchase price (also known as the bid). The difference between the purchase price and the selling price is known as a spread, and is basically a trade fee.
4. Add order
An order is an instruction to automatically trade at a point in the future when the price reaches a certain level determined by you. You can use stop and limit orders to help ensure that you lock in every profit and minimize your risk when your target profit or risk of loss is reached.
Although not mandatory, given the volatility in the FX market using and understanding risk management tools such as stop loss orders is very important.
Stop loss orders are instructions for closing trades at prices worse than the current market level and, as the name suggests, are used to help minimize losses. There are two types of stop loss orders - standard and guaranteed.
The standard stop loss order, once triggered, closes the trade at the best available price. Therefore there is a risk that the closing price may differ from the order level if the market price difference.
However, guaranteed stop loss, where the small premium is charged to the trigger, guarantees to close your trade at the stop loss level you have set, regardless of the market gap. A limit order is an instruction to close a trade at a price that is better than the current market level and is used to help lock the price target. Standard stop loss and limit orders are freely placed and can be implemented in transaction tickets when you first trade, and you can also attach orders to existing open positions.
5. Monitor and close your trade
Once open, your trading profits and losses will now fluctuate with each step in the market price.
You can track market prices, see unrealized profit / loss updates in real time, attach orders to open positions and add new trades or close existing trades from your computer or application on your smartphone and tablet.
6. Close your trade
When you are ready to close your trade, you only need to do the opposite of the opening trade. If you buy 3 CFDs to open, you will sell 3 CFDs to close. By closing the trade, your net income and open losses will be realized and immediately reflected in your account's cash balance. Please note that the City Index and CFD Betting Account is FIFO.
So many tips that I can share this time, about How to do Forex Trading ?. Hopefully useful and good luck.
At City Index, you can speculate about the direction of the currency in the future, whether in a long or short position depending on whether you think the currency will go up or down. The video below shows you how to trade EUR / USD currency pairs with CFDs.
1. Select a currency pair
Determine which currency pair you want to trade. With more than 65 currency pairs to choose from, choosing the right trading opportunity for you is important.
City Index's technical research tools and fundamentals can help you see currency trading opportunities that suit your trading style. We recommend that you take the time to understand the amount of price volatility associated with a currency pair to help manage your risk.
2. Determine the type of FX trading
There are three ways to trade forex with Barter Spread, CFD, or Forex Trading. Each has a certain bet size:
- In spread bets, you exchange pounds per point movement
- In trading CFDs you trade a number of CFDs in the unit of the base currency (the currency on the left). For example, if you trade GBP / USD, your shares will be in Pounds, while in USD / JPY your shares will be in US Dollars
- In Forex trading you buy a lot, in the base currency unit (currency on the left)
- For example, if you trade GBP / USD, your shares will be in Pounds, while in USD / JPY your shares will be in US Dollars (minimum stock size is 1000)
3. Decide to buy or sell
After you choose the market, you need to know the current price on the trade, which you can do by bringing an order ticket on the platform. All forex are quoted in one currency compared to other currencies. Each currency pair has a 'base' currency and 'bidding' currency. The base currency is the currency to the left of the currency pair and the quote currency on the right. Simply put, when trading foreign currencies, you will:
BUY a currency pair if you believe that the base currency will strengthen against the quote currency, or the quote currency will weaken against the base currency. Your profits will rise along with every increase in exchange rates. Every fall in the price of an exchange below your open level will make you lose.
SELL a currency pair if you believe that the base currency will weaken in value against the quote currency, or the quote currency will strengthen against the base currency. Your profits will increase as each exchange price point falls. Every increase in the price of an exchange above your open level will make you lose.
Spread - FX pairs have two prices.
The first price is the selling price (known as the bid) and the second price is the purchase price (also known as the bid). The difference between the purchase price and the selling price is known as a spread, and is basically a trade fee.
4. Add order
An order is an instruction to automatically trade at a point in the future when the price reaches a certain level determined by you. You can use stop and limit orders to help ensure that you lock in every profit and minimize your risk when your target profit or risk of loss is reached.
Although not mandatory, given the volatility in the FX market using and understanding risk management tools such as stop loss orders is very important.
Stop loss orders are instructions for closing trades at prices worse than the current market level and, as the name suggests, are used to help minimize losses. There are two types of stop loss orders - standard and guaranteed.
The standard stop loss order, once triggered, closes the trade at the best available price. Therefore there is a risk that the closing price may differ from the order level if the market price difference.
However, guaranteed stop loss, where the small premium is charged to the trigger, guarantees to close your trade at the stop loss level you have set, regardless of the market gap. A limit order is an instruction to close a trade at a price that is better than the current market level and is used to help lock the price target. Standard stop loss and limit orders are freely placed and can be implemented in transaction tickets when you first trade, and you can also attach orders to existing open positions.
5. Monitor and close your trade
Once open, your trading profits and losses will now fluctuate with each step in the market price.
You can track market prices, see unrealized profit / loss updates in real time, attach orders to open positions and add new trades or close existing trades from your computer or application on your smartphone and tablet.
6. Close your trade
When you are ready to close your trade, you only need to do the opposite of the opening trade. If you buy 3 CFDs to open, you will sell 3 CFDs to close. By closing the trade, your net income and open losses will be realized and immediately reflected in your account's cash balance. Please note that the City Index and CFD Betting Account is FIFO.
So many tips that I can share this time, about How to do Forex Trading ?. Hopefully useful and good luck.
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