Forex Exchange: How to Get Started Earning
When it comes to the complex but intriguing world of trading, indices are a safe place to start. They are a measurement of the price performance of a group of shares from an exchange, such as those exchanges that monitor the top 100 companies on the JSE, for example.
So, where do you start? Well, to gain access to stock indices trading, you need to choose a reliable broker that will provide access to trading and a convenient platform (software) for online trading. Also, to make earnings, you will need a “leverage” range from 100 to 2,000 or more.
As a result, as an example, by depositing only $1,000 (around R18,000) into your account with a leverage of 1 to 100, you will be able to operate with $100,000 during the transaction. By selling and buying different currencies, you can either earn or lose on the exchange rate difference.
At the same time, good platforms have a large number of automatic indicators for market analysis, both technical and graphical (up to fifty), which make it easier to navigate the ongoing process.
Forex Exchange Opening Hours
The Forex “exchange” has a strictly limited working time — any operations start at 2 am on Monday and end at 2 am on Saturday. It seems that this is quite a reasonable restriction for especially ardent traders who could analyse the situation and sell or buy currency almost 24 hours a day. All this time, not only speculators and investors, but also banks, make profits or incur losses.
The work can also be limited by the popular Forex brokers themselves – who work in dealing centres. By the way, at the moment the activities of such organisations in the Russian Federation are not subject to regulation and control.
Beginning on the Forex Exchange
If you’d like to introduce yourself to the Forex market, study the “introductory data” — account types, broker margin requirements, client documents, etc. Accounts differ in terms of the minimum deposit (100 USD/EUR or more), and available trading instruments (not only classic currency pairs, but also CFD — contract for difference — on metals, energies, indices and stocks).
Leverage varies depending on the broker (1 to 25 — 1 to 500) and many other parameters. By analysing the data and evaluating trends in a timely manner, it is possible both to acquire a growing currency (or another instrument) and to sell a declining one relative to others in time.
Forex Trading
Forex “stock” trading in the United States is regulated by the government’s Commodity Futures Trading Commission. Bidding rules and conflict resolution are managed by a non-governmental association (National Futures Association).
Traders outside the US are trying to comply with the American NFA, as both private traders and funds avoid companies that do not meet the level set by the NFA.
And only in December 2014 the relevant law was adopted, which clarified the essence of the concept (as trading on an unorganised market), and made it possible to protect individuals from fraudsters by requiring the registration of a forex dealer in an SRO. Hence the importance of using a reputable trading service or platform.
Forex Exchange for Beginners — Basics
The first thing that attracts the Forex exchange for beginners is that you can learn the basics of trading here. Before becoming a trader, it is important to:
- Choose a suitable broker to carry out operations (he will provide both software and “shoulder”);
- Understand the terms, study the main methods of analysis (fundamental – by country, technical – for specific operations);
- Download software (terminal, most often Metatrader of the appropriate version);
- Try out the main types of operations in demo mode, and not on real money.
Experienced tips are as follows:
Trade not on a schedule, but when you have a balanced, thoughtful decision.
- Do not read everything in a row – choose the most important from trusted sources.
- Study trends, but don’t focus on them.
- Think over scenarios of actions, do not rely on “sudden inspiration”. Know exactly when you will stop operations.
Nuances:
Currency pair — any two currencies, one of which rises or falls concerning the other.
- The name encodes the direction of trades: base currency/quote currency. Base — bought/sold, quote currency — measures the ” rate ” value.
- There are four major pairs: EUR/USD, USD/CHF (with Swiss Franc), GBP/USD, and USD/JPY (with Japanese yen). They are called Majors.
- Up to 90% of transactions are made with the US dollar, 37% with — the euro, 20% — with the yen, and the British pound sterling — no more than 17% of all transactions.
- Maximum activity (and change in quotes) occurs when the national banks of countries change rates. This time is called trading sessions.
Psychology of Work on the Forex Exchange
Before even thinking about starting, it is essential to understand the psychology of working on the Forex exchange. According to unofficial statistics, up to 95% of traders waste their funds without achieving any profit.
Funds go to the accounts of dealing centres. Detailed training, planning, work strategy, precise analysis, and pre-thought-out schemes of actions, making operations only with a complete understanding of the current process, are the main components of the psychology of working on Forex.
Punctuality and pedantry in implementing their decisions are the only salvation for “hot heads” and those prone to greed and thirst for a quick profit.
Note: Before working with any new currency, it is essential to conduct a fundamental analysis — to study the state of the country, current processes, and global trends so as not to focus on short-term “differences” in quotations.