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Forex Trading: Understanding in a simple way


biwake

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Forex is not a new word these days. It is quite similar to other businesses like equity market, commodity market, etc. The ultimate goal of Forex is also to make money by utilizing knowledge and skills. In fact it has roots to some old times. Now the question arises that what Forex is? It is a business of foreign currency trading through different brokerage houses which are similar to equity market brokerages. In present Era, computers and internet has made it very easy for Forex Trading.

 

Methodology

The very first but challenging job is to find a reputable and good market standing brokerage house. Then in the second step a person is required to open an account with them. The account holder is required to maintain a stipulated balance in his account. The brokerage house will execute the transactions on behalf of account holder and will credit the profits made out of transactions to the respective account. Anyhow the brokerage house will charge a small amount of commission against each completed transaction.

 

Choice of Currencies

It should be noted that currencies are traded in pairs. For example there are four main pairs used in forex trade. They are British Pound and US Dollar (GBP/USD), Euro and USD (EUR/USD), US Dollar and Japanes Yen (USD/JPY), US Dollar and Swiss Frank (USD/CHF). In any choice of currency pair the first currency works as commodity while the second one serves as money. In simple words e.g., when one selects GBP/USD, it means in a buy trade, he will buy British Pound against USD payment and at in selling, he will sell British Pound against USD. But there is nothing to worry about its complexity because all this is done through intelligent software.

 

Art of Making Money

Everyone has the understanding of making money i.e. buy at low price and sell at a higher price. It is the most ancient, common principal and applies to Forex as well. The below example will elaborate this concept in a more understandable manner:

 

Currency Pair: GBP/USD

In Buy:

GBP = 1.60 USD

At selling time:

GBP = 1.99 USD

This shows that you have made a profit of 0.39 USD per British Pound you sold. Isn’t Good? 

 

Here comes the point that when is the best time for a trade. I feel that crux of making money lies in the timings of purchase and sales both. Although there can be many analytical tools, which may be used to determine the right choice of time, but generally there are two main methods. They are Technical Analysis and Fundamental Analysis.

 

Technical Analysis:

In technical analysis as the name indicates, price charts and indices are used to predict the optimal buying : selling times. It works purely on scientific basis and one needs to learn it as a science if he wants to make profits from forex trading. Anyhow it will not take a long span of time to learn this method, but regarding cost of learning, it is suggested to use free courses, which might be searched on internet.

 

Fundamental Analysis:

Now this is the more practiced method of forex trading. It takes into account the prediction of future movement in currencies based upon the economic, political and geo political situations of the countries. But don’t forget that one should also be wise enough to use this method in order to understand the changing circumstances. For example if Japan’s finance minister announces the positive economic growth, it will mean that Japanese Yen will get strength and hence the Yen rate will rise. Same goes for other currencies.

 

Summary

Forex is a good business which can be run home based and on full time or part time bases. It can help to earn reasonable amount of money without any hassle of marketing, advertising, staffing, etc. The major advantage of forex trading is that it does not require big capital but can be started from small amount.

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Currency trading is merely a shorter edition of foreign exchange; this is the system in which the of world foreign exchange are compared to one another. Simply speaking, forex forex trading is enjoying how these principles change daily, every week, per month, per month, or even yearly, by dealing forex. For example, you can buy Dollars (EUR) by spending US dollars (USD), and later, sell the Dollars if its value in the market increases. This can be done with any forex that is available for return in your country.

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Small-Phrase and Long-Phrase Trading ---- Forex dealing can be done at any period of time. You can prefer to business with permeating currency trading principles in simple days, enjoying rapid industry motions, and possibly generating (or losing) twice of what it has taken. Or, you can delay it out for years, expecting that the long-term industry motions will advantage the business you decided to make.

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if we only understand it without us doing the trading practices seem very simple but if we already are in a direct trade of course it's not as simple as it requires a lot of processes that we must live and takes a long time to learn profitable trading and it is not simple but it is quite difficult if we have jumped directly in real trade

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is the theory and practice are two currency pairs such as they are related to one another so that if we only know the theory without the support of the practice will not succeed, in practice as well as in the absence of theory and practice is only just that we use will not get the results maximum, therefore when we start learning we also have to learn the theory in practice so that it will reach the target that we want

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is the theory and practice is something that is not separated because if we just execute any one of these conditions, our results we get are not very effective at our trade, and of course with our second run it will be easier to get a trading system well if we have the guts to do it

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courage and conviction in my heart that we should really be planted, as if only half-heartedly we learn will not be able to control the actual forex trading. with the courage and conviction to myself if we run the risk of failure in forex trading will continue to try to rectify the failure and eventually will get satisfactory results.

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About the summary to mention forex as a good business which can be run home based and on full time or part time bases. It can help to earn reasonable amount of money without any hassle of marketing, advertising, staffing, etc, I do not feel it is as good as we think here. Forex also has the high risk. Then if we are a broker, we need to find investors as well

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About the summary to mention forex as a good business which can be run home based and on full time or part time bases. It can help to earn reasonable amount of money without any hassle of marketing, advertising, staffing, etc, I do not feel it is as good as we think here. Forex also has the high risk. Then if we are a broker, we need to find investors as well

 

Well, trading is indeed good business if you are able to learn so that you can understand and comprehend trading enough to can make profits out of your trades. It is good in that you can work from home without having a boss and less hassles of marketing and advertising indeed. They key is to learn and practice as much as possible to make sure that you give yourself an advantage.

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Yea all this are true for sure we dont need to take this business just like that I think the best thing to do is just for us to keep on learning forex with good manner and make our emotion stay aside then we can see forex tradin as a very profitable business and when learn you understand allmost all its takes to become a good trader.

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forex is risky business but traders still able to get decent profit by have good trading method, keep discipline with it and always keep their psychological level under control. in order to build it, need time and especially patient and its why to success in forex trading, need a lot of time.

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Yes, patience is indeed a virtue here because the minute you try to rush your learning experience you will end up neglecting processes and techniques that would be valuable in making you profitable and minimizing your losses. Its just better to take it easy and remember that there are really no shortcuts to making profits in forex.

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Well, trading is indeed good business if you are able to learn so that you can understand and comprehend trading enough to can make profits out of your trades. It is good in that you can work from home without having a boss and less hassles of marketing and advertising indeed. They key is to learn and practice as much as possible to make sure that you give yourself an advantage.

Keep practicing and spending the time in trading here is one of the most important thing in Forex here. This is very true, we need to spend the time here, so we know, and we can see how the market goes, and how the bad thing happens usually here. This is the real fact

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That is if we are serious and already have the basic idea about Forex trading. That is to have buy and sell of trade and to make profits in every trade we will make. That's the basics that we need to keep and also about the risks and capital. Most often when are done with the basics we are often think about the PIPS or the unit when we are trading. Also, to know the trading platform where we will execute our trades.

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As long as one does have the basics about forex trading they can be able to explore other learning materials and even get to play around with a demo account. What really matters is that you have a good understanding because this is the foundation that you will increase as you practice.

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But then, those mistakes we are talking about will be also the idea on handling our trading correctly. From the experiences we have in our losses will be a way to have better trading and to do right thing next time. Simple but not easy to achieve as we will soon have different mistakes and in different situations of the market which we need to look and understand.

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  • 2 weeks later...

yes, no shortcut and to overcome all the complexity in this business, all trader should spend their time to learning and practice. but maybe its not enough because little bit research activity in order to found the correct strategy being used to traders. and this activity maybe will take long period.

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We must have taken first the basics in order to understand those complicated or advance things in Forex. So, obviously we will need to take care of how to trade first and then, sooner will focus in different kind of strategies and indicators. This will surely takes time because, there's no easy in Forex and that we can't learn it quickly.

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Yes, there is no shortcuts in here because before learning those advance things in Forex trading then one must know the basic it because for sure you can't understand things when you don't even know the basic about the business you are interested with. So, it's better to follow it step by step so you can be sure about.

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Its all about supply and demand. For example if you have US dollars and you want yen The exchange rate will going to chance depends on demands and supply. If theirs a lot of supply of yen then the price can go up in US dollars. If theirs lot of demands in yen the price of US dollars will drop. That's why its good to make good income in forex if we are trading knowing what the supply and the demand.

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Forex trading is easy to learn but very difficult to implement because as we can see the market movements will be just changing every time and with in seconds the market will be just falling down and moving up . A trader should be very careful in taking the right decision on right time .

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