Floating prices provide a good opportunity for speculation on exchanges. The idea of speculation is to buy something, hold it for some time and then resell it at a higher price in order to gain profit. But trading on the exchange is not all rose-colored, it does involve certain risks. Suppose, you buy a product hoping that its price will move up in future, but it turns out that the price goes down. As a result, you have to sell the product at a lower price and suffer loss. Note that speculation always involves two operations: buying something and then selling it.

You already know that speculation can bring some amount of risk to traders who fail to forecast price movements. To be a successful trader, you should be able to analyze and assess the situation in the market. This will help you to correctly predict the market behavior, in other words, price movements.

There are two basic approaches to analyzing the situation in the market:. The fundamental analysis concentrates on the underlying causes of price movements, while the technical analysis studies the price movements themselves.

Volumes of books have been written about both of these approaches. We will just scratch the surface and consider the essential difference between them. Prices constantly change because they are affected by an overwhelming variety of conditions and factors, such as economic, political, social, etc.

These factor and conditions are what the fundamental analysis focuses on. To predict price movements, fundamentalists have to:. As opposed to fundamentalists, technicians hold that all current market information is already reflected in the market price. Therefore, a study of price action is all that is required.

Technicians use the history of prices to predict future prices. The most basic concept of technical analysis is that prices have a tendency to trend. There are three types of price trends:. The traders' golden rule says: "The trend is your friend".

By this they mean that the best trading strategy is to follow the trend. If the price is trending:. The primary tools of technical analysis are charts. Charts are a graphical presentation of the price movement. They show the change of the price within a certain time period, e. month, week, day, 1 hour, 30 minutes, etc. In addition to charts, technicians use hundreds of indicators that help to identify better trading opportunities. Fundamentalists and technicians have been at odds with one another for a long time.

There is no a clear answer as to which approach is better. The general assumption is that fundamental analysis requires much time and effort and, therefore, is better for long-term traders.

Short-term traders are usually recommended to use technical analysis. It is less time-consuming and allows to follow many markets. However, most traders agree that it is more effective to use technical analysis in combination with the fundamental one.

By knowing the tactics and techniques of both approaches, you will be better suited to make your own trading decisions. Now that you have got the general idea of what the exchange trade is, it's high time we moved to the main subject and discuss everything which concerns trading on Forex.

This article describes the traditional procedure of Forex trading introducing the most basic terms and notions related to the subject. Maybe you have traveled to Canada and exchanged your American dollars for Canadian dollars. Or, perhaps, you have traveled from England to Japan and exchanged your English pounds for yens. If so, you have actually experienced what happens on Forex. Forex Foreign exchange is an exchange where different currencies money are traded.

There are domestic currency and foreign currencies on Forex. The domestic currency is the currency for which you buy and sell foreign currencies. To understand the difference better, compare Forex with a commodity exchange.

On the commodity exchange you buy and sell products for money. On Forex it is the same. You buy and sell foreign currencies as though products for a domestic currency money. Domestic currencies are country-dependent.

In US you buy and sell foreign currencies for American dollars, in Japan for Japanese yens, in Great Britain for British pounds, etc. When you buy or sell currencies, you actually exchange one currency for another. The first currency in a currency pair is called a base currency. The second one is called a counter currency. Lot is a unit to measure the amount of the trade. The value of the trade always corresponds to an integer number of lots. Depending on the operation Buy or Sell you want to perform on Forex, you are quoted either an ask price or a bid price.

Ask price is the price at which you can buy a currency from a dealer. Bid price is the price at which you can sell a currency to a dealer. The difference between the ask price and the bid price makes it possible for Forex to be profitable. That is why the ask price is always higher than the bid price. The difference between the ask price and the bid price is called the spread.

Note that each currency pair has its own spread which is usually fixed. Spreads are measured in pips. Pip is the smallest possible change of the price. All currency pairs are priced to a fixed precision. There are currency pairs which are priced to two digits after the decimal point.

The smallest change of such currency pairs will always be 0. However, most currency pairs are priced to four digits after the decimal point. The goal of any Forex trader is to make profit. To benefit on Forex, you should do one of the following:. As you see, in both cases you necessarily perform two opposite operations. Together these operations form a position.

When you perform the first operation either buy or sell , you open a position. If you buy a currency, you open a buy position traditionally referred to as a long position. If you sell a currency, you open a sell position traditionally referred to as a short position.

When you perform the second operation opposite to the first one , you close the position and enjoy your profit. Note that you can get profit only after closing the position. A position can be closed on the same day it is opened. Or, it can be held open past the end of trading day. In this case the position will be rolled forward to the next trading day.

This process is known as a rollover. The trading day hours are specific to each foreign exchange. For instance, New York foreign exchange opens at am and closes at pm EST GMT It doesn't work on Saturdays and Sundays. Let us now consider some examples to show how speculation on Forex can be performed. Trading on Forex can create massive amounts of wealth, but it is not without risks. Let us consider another example. But suddenly the trend changes and the price starts to move down.

You still wait for some time hoping that the situation will improve. The best solution in this case would be, of course, to close the position at point B or at least somewhere between A and B since after that the trend has changed. However, it has been quite reasonable to sell the Euros shortly after the change of the trend.

Note that the price has fallen by 20 pips for less than 20 minutes. So, if you had not closed the position at point C, you would have suffered much greater losses. Not sure how to get started? No problem. Follow this step-by-step guide. Exness News Forex Education Forex in a Nutshell Forex Education Forex in a Nutshell. June 27, Start learning how to trade currencies from home Forex basics Forex is short for foreign exchange.

Trading account Signing up has become much easier and faster than you might think. The proper way to start trading The natural order is to sign up, get to know the software, make a few demo trades, and start following the market. Start learning how to trade currencies from home Set up an Exness Account Now Not sure how to get started? Disclaimer: the publication of analysis is a marketing communication and does not constitute investment advice or research.

Analysis is not prepared in accordance with legal requirements promoting independent investment research and Exness is not subject to any prohibition on dealing before the release of analytics. Readers should consider the possibility that they might incur losses. Exness is not liable for any losses incurred due to the use of analysis. Risk warning: CFDs are leveraged products. Trading them carries a high level of risk, so it is not appropriate for all investors.

The value of investments can both increase and decrease and an investor may lose all of their invested capital. Under no circumstances shall the Company have any liability to any person or entity for any loss or damage in whole or part caused by, resulting from or relating to any transactions in CFDs.

This is similar to stock trading. A stock trader will buy a stock if they think its price will rise in the future and sell a stock if they think its price will fall in the future. Similarly, a forex trader will buy a currency pair if they expect its exchange rate will rise in the future and sell a currency pair if they expect its exchange rate will fall in the future.

This knowledge will assist them in understanding how currencies compare to one another and help to increase their chances of experiencing significant returns. The two main ways to trade in the foreign currency market is the simple buying and selling of currency pairs, where you go long one currency and short another.

The second way is through the purchasing of derivatives that track the movements of a specific currency pair. Both of these techniques are highly similar to techniques in the equities market. The most common way is to simply buy and sell currency pairs, much in the same way most individuals buy and sell stocks. In this case, you are hoping the value of the pair itself changes in a favorable manner. If you go long a currency pair, you are hoping that the value of the pair increases.

This pair rises when the U. dollar increases in value against the Canadian dollar, so it is a bet on the U. FOREX trading tips.

We could all use a little extra income, and the internet offers dozens if not hundreds of ways to make money from home, but do they all perform as promised? From blogging to self-publishing books, there are many options to choose from in , but many opportunities take years to develop with no immediate return. Start learning how to trade currencies from home.

Forex is short for foreign exchange. Ever used those kiosks and exchange windows at the airport? For example, British tourists will bBuy euros with their pounds to spend while on their Spanish vacation. This is foreign exchange in the physical. One day, for example, GBP is high, so you go and Buy euros. A few weeks later, GBP is down and the euro hits new highs, so you Buy GBP with your euros.

Everything can be done from the comfort of your home or even on the go using a trading app. Brokers use CFDs Contracts for Difference to measure the profits and losses of the trades. You open a trade, you close it later on, and the broker updates your account based on the difference. As with any business or service, the broker must also benefit from the transaction, and like the exchange kiosks, brokers have a spread. The price of buying is always slightly higher than when you sell.

Since brokers have massive volumes from thousands of traders each day, they offer a much better spread than the kiosks, but the principle works the same. Signing up has become much easier and faster than you might think. The recent upgrades made by the Exness development team made the user experience a priority so you can feel comfortable from the start.

Protecting client data is also important to Exness, so all communications between the server and trading terminal are encrypted using bit keys. You are not required to make a deposit immediately. The trading platform has many features for both newbies and pros including instant opening and closing of trades. You can view the markets and even test your skills as a trader using a risk-free demo account. Only when you want to start targeting real profits must you make a deposit. Exness accounts vary and offer different trading conditions.

A modest and affordable deposit can make your trades real and provide the thrill of a win, but also the experience of taking a loss or waiting out a storm. The natural order is to sign up, get to know the software, make a few demo trades, and start following the market.

Open multiple trades with the aim to make a small pocket-change profit each week. As your understanding of the foreign exchange market increases, so can your trading budget.

Good things take time, and trading is no exception. Before you start running with high leverage, take some baby steps on a modest budget. Remember, you are not obliged to trade every day. There will always be a surprise or two around the corner, so avoid unnecessary chances. Save your funds for those trading pairs that show great potential. If you are winning more than you are losing, then it might be time to up your game and start targeting more significant profits.

Set up an Exness Account Now. Not sure how to get started? No problem. Follow this step-by-step guide. Exness News Forex Education Forex in a Nutshell Forex Education Forex in a Nutshell. June 27, Start learning how to trade currencies from home Forex basics Forex is short for foreign exchange.

Trading account Signing up has become much easier and faster than you might think. The proper way to start trading The natural order is to sign up, get to know the software, make a few demo trades, and start following the market. Start learning how to trade currencies from home Set up an Exness Account Now Not sure how to get started? Disclaimer: the publication of analysis is a marketing communication and does not constitute investment advice or research.

Analysis is not prepared in accordance with legal requirements promoting independent investment research and Exness is not subject to any prohibition on dealing before the release of analytics. Readers should consider the possibility that they might incur losses.

Exness is not liable for any losses incurred due to the use of analysis. Risk warning: CFDs are leveraged products. Trading them carries a high level of risk, so it is not appropriate for all investors.

The value of investments can both increase and decrease and an investor may lose all of their invested capital. Under no circumstances shall the Company have any liability to any person or entity for any loss or damage in whole or part caused by, resulting from or relating to any transactions in CFDs. Confident in your trading skills?

Open an account and start trading with Exness.

Forex Trading Strategies Scalping With Alignment Of Trend. When you buy or sell currencies, you actually exchange one currency for another. Now that you have got the general idea of what the exchange trade is, it's high time we moved to the main subject and discuss everything which concerns trading on Forex. Forex is short for foreign exchange. Should you have more than one position, you could have a chance to cover the losses on this position. So what if you are not a millionaire, but also cherish the hope of making a fortune?

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