What Exactly Do You Understand By The Term Best Learn Forex Trading In India?

What Exactly Do You Understand By The Term Best Learn Forex Trading In India?

Like Stockmarket, the Forex market is also very flexible and volatile. So, before jumping into this one should know about the basic facts of the market like how it works, about currencies pairs Etc.

Currency market works via a global network of banks, business and individuals that are constantly buying and selling currencies from one another.

Forex market is also known as over-the-counter market, and it means that currency prices are constantly fluctuating in value against each other, potentially offering a greater number of trading opportunities.

Countries - London, Tokyo, New York and Sydney have the currency markets. They work simultaneously.

Here are some Initial Steps which one should follow before trading -

Choose the Best Pair of Currency - In total there are 128 currency pairs in which one can trade. In simple terms, one can couple two currencies for forex trading.

If you are a beginner you should know about the most traded Currencies. Here is a list of the same -

·         EUR ( European Currency)

·         GBP (British Pound Sterling)

·         CAD ( Canadian Dollar)

·         AUD (Australian Dollar)

·         NZD ( New Zealand Dollar)

·         JPY ( Japanese Yen)

Reason that - Why these currency pairs are on top?

Categories of Currency Pairs - There are three categories - Major Currency Pairs, Minor Currency Pairs, and Exotic Currency Pairs.

When the trade happens between the biggest Currencies e.g. US Dollars, European Dollars etc. then these pairs are termed as Major Currency Pairs.

Similarly, when other than major currencies make a pairs they are termed as minor currency pairs or major cross pairs.

Exotic Pairs have those currencies which are less - traded e.g.  Mexican Currency, Turkish Lira etc.

How to trade in currency market - Once you select their Currency Pairs, the next step is how to start first trade in forex?

Basically, you can make a trade by two ways either using Spot Forex Trading Method or Forex Derivatives Method. Spot Forex Trading Method allows you to buy or sell currencies after deciding that how much of the base currency you want to buy or sell. On the other Side, In Forex Derivatives Method, you can speculate on the price movement without buying or selling currencies.

Risk Assessment - It's been important to start managing your risk from the day one, when you start your trading journey. If you practice this in every trade, it will change your every forex trade into a successful trade.

Close your trade - It's time to close your trade, but keep monitoring if you enter into a trade it's important to keep your eyes on its price movement.

Important Terms you should know about -

Base and Quote Currency - Have you ever notice the Currency Pairs. Suppose you buy this Currency Pair EUR/USD. What does it means?? It shows that you are buying the European Dollars while selling the US DOLLAR.

Although, you can say that the first currency is base Currency which is EURO in the above given example or the second given Currency is Quote Currency.

Pips, lots and margin - Pips are a standardized unit of measurement which shows the changing value between the Currencies. Let's take an example suppose I took a currency pair EUR/USD and it moves from 100.1910 to 100.1916. What you see??

Yes!! You got it right, the currency price moves from fourth number after decimal which means its price has gone up by seven pips.

Gaps - This mostly happens when market closes and opened next day with a hike in price. Let's take an example - suppose market is closed today on 100 and on next day it opens with 120, so this gap of 100-120 shows the market gap.

CFD: Contract for Difference (CFD) is when you buy a currency for $1 and sold it to $ 2. You would directly get a profit of $ 1. You can make a trade by speculating the buying and selling price. This method is mostly used in Future Markets.

Stop-loss Order - If we start our trade and in between we feel like this trade would be not beneficial. At this time, the stop loss order will help you from losses. It's like a Panacea for a trader.

Above given points will help you to making your trading journey simple and smooth. For beginners, it's a basic terms which one should know about before trading.