What Online Forex Trading is All About
Forex trading online is facilitated and transacted through the interbank online exchange market via multiple Internet connections, and it is open 24 hrs a day every week day and half day on Sunday, due to differences in time zones within the specified global time zones.
The 24 hour market day has 3 sessions:
- New York Session
- London UK Session
- Asia Session
New York, London and Asia Sessions
When data centers in Europe are closed, those in US are open and when those in USA are closed then those in Asia are open, and this forms the foreign exchange 24 hour day cycle.
What Forex is all about
Forex entails the buying and selling of one currency for another. This term is derived from foreign-for and exchange-ex. This type of investing is somehow similar to stock investing. Buying a currency, It is like buying a share based on which country the money belongs to, the price at which currency pairs are quoted is known as exchange rates and these rates are quoted and plotted using charts.
Just like the stocks investment, Forex currency moves are determined by demand supply as well as the economic outlook of that currency and political factors. However, the online exchange (speculative) exists for the purpose of the very possibility of purchasing a currency at a low value and then selling it at a higher value this demands investors to scrutinize the trend/direction of the market through a Forex strategy.
Other financial Instruments also continue to be added in the online spot exchange market. These new financial instruments are also traded in the same way as spot currencies. From around 2013, online brokers started adding the following financial instruments to be traded alongside spot currencies:
Commodities: GOLD and SILVER
Futures: CORN, WHEAT, SBEAN
Energies: NGAS, OIL
Indices: DOW, NSDQ, SP, NK,DAX, FTSE, SMI, ESX50 and CAC
These instruments are made available in the spot market, most of them being quoted against the US Dollar - USD, and with their popularity growing, these instruments continue to gain almost mainstream recognition just like currencies.
Because these financial instruments are offered alongside Foreign exchange currencies and quoted against the USD, these are also becoming part of the online foreign exchange market a.k.a spot market.
Aspects of Online Foreign Exchange
The Forex software is one of the aspects and it is available from Online FX brokers to enable investors to receive financial information and execute transactions on this platform.
Profitable trading requires good financial management and in fact FX basically is the kind of internet trading designed for profiting from others therefore one has to create a good profitable system and a plan.
There exist several ways of analyzing currencies, but the most effective one among them is the use of a system. This kind of system uses indicators to predict price direction and momentum.
Advantages of FX
Leverage is one of the major advantages just invest $10,000 US Dollars and you get leveraged by your broker to the tune of 100:1 leverage and you can now buy contracts worth $1,000,000 or 1 million dollars and make profits of $10,000 dollars for every time that the exchange rate changes by a one cent (100 pips).
Forex is a money making idea that enables you to transact online and you can invest without being confined to any zone.
Online trading allows you to work from home with a computer from anywhere across the world and it is open 24 hours during the weekdays, this is why it is referred to as the global market.
Steps to Follow to Start
To start, the first thing you need to do is to find is a Broker, this we have already done for you and you can read about the Best Broker - Best Broker Information:
Then follow these steps:
- Open a practice account with an online broker.
- Train using this tutorial website where you will find all the training lessons required to learn.
- Use a trading system to analyze the price movement, the best system is one that you develop and create for yourself.
- Practice until you start making profits on your demo account
- Then invest after considering the amount that you want start with.
Forex Accounts: in FX there are 2 types of account the demo account and live account. Beginners will open a demo account which is a free practice account that the trader can use while learning. No money is invested for a demo account, the funds are virtual and meant for practice. Once one has completed learning and is making profits and ready to start trading the live market, one will then open a live account, deposit their capital and start transacting on the real market.
Tips to make profit
- Follow the trend, How well you do that will determine how profitable your results will be.
- Learn utmost from using free demo accounts and free training tools and tutorials provided by this free online learning website to help you achieve the desired success in your investment. This tutorial will show you All learning and training topics and tips.
- Don't Forget about technical indicators and fundamental indicators (news) that are commonly used to analyze the price movements, these are
- Technical Indicators- used in technical analysis to determine price movement.
- Fundamental Indicators- Used to in prediction methods using fundamental economic indicators/economic news reports
Training tutorials also provides information about currency market and the risks involved as well, for those who want to start, a good tutorial can provide a good start by explaining all about Forex and the topics that beginners are required to know.
All of us have already participated in Foreign exchange with out us being aware of it. A particular example which is done on a regular day to day basis in all parts of the world is when a need arises to and we seek the service of money changers and in that way, we have already exchanged foreign currency and participated.
Example of FX Software
MT4 Platform Software
This platform is for streaming price quotes from your broker, these price quotes are also represented in form of charts. The charts are then used to analyze currency pair movements so as to decide which side the prices are likely to head and investors can place trades in that direction. To get the software platform, just go to your Forex broker's website and download this platform software for free.
Be it that as it is there is still no perfect business in the world- you gain some, you lose some. However, tutorials discuss some risks in trading and offers techniques to keep risks minimal. It provides strategic steps to stop you from risking your money like money management strategies. You may still lose money but the good thing is that you will not lose more than what you specify and will make more in the long run.
FX tutorials have everything covered from the way to beginning learning how to become profitable and also shows investors how to come up with a trading schedule of when is the best time to be in the market. These are the times when the markets are very liquid and volatility is the highest making it the best time to transact.
However, before this you should learn the effective FX strategies used to develop trading systems and strategies, used in the world of foreign exchange. Below is an example of a system.
Tutorials For Beginners - Systems and Strategies
For more information about strategies and systems, navigate to these 2 tutorials: