Forex trading for beginners pdf part 1 - ProForex

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Monday, November 13, 2017

Forex trading for beginners pdf part 1

Forex trading for beginners pdf part 1

You will found The of this free courses pdf in the end of this articles or you can read it here better than download thr file pdf

Forex trading for beginners pdf part 1
Forex trading for beginners pdf part 1

Forex trading for beginners pdf part 1

lessons 1 : What is currency or Forex market

currency market Also called "forex currency market" or Forex, the forex exchange market is a market extremely interesting for the particular investors.
He indeed allows speculating on the exchange rate of the currencies they enter and so to take advantage of the increase as in the reduction.
To understand better the advantages, the functioning and the way of investing in this market, here are some practical explanations and some advice.

Definition of the forex currency market:

The forex currency market is more collectively called "Forex". This term comes from the contraction of the English term " Foreign Exchange ", meaning in French "foreign exchange market". It is on this market that is determined the exchange rate of a currency with regard to the other one.
When we consult the foreign exchange market, we cannot thus consult the rate of a single currency, but a pair of currencies. For example, we shall see the pair of currencies EUR / USD which corresponds to the exchange rate of a Euro-denominated in dollars. Plainly if the exchange rate of the EUR / USD is 1.25, it means that a Euro amounts to 1.25 Dollars. This quotation is expressed pips there.

" is this good article for you , if yes then the next article about the great forex indicators ( bilan indicators) is good for you"

The forex currency market is thus by definition an international market, what makes it one of the markets the most volatile because it is accessible all around the world.

Functioning of the foreign currency  market:

The exchange rate of a currency with regard to the other one is fixed according to various criteria but depends essentially on buyers' proportion with regard to the number of sellers of a pair of currencies.
When we speculate on the foreign exchange market, we can is to buy a pair of currencies, what means that we consider that its price is going to rise, or on the contrary to sell it, hoping that its price is going to fall.

Plainly when we buy of the EUR / USD, it means selling Dollars to buy Euros. On the contrary, when we sell of the EUR / USD, we sell of the Euro to buy of the Dollar.

Schedules for trader on Forex

You doubtless know that one of the peculiarities of the market Forex is that he allows of trader 24 hours a day from Sunday evening till Friday evening. It is made possible by the fact that there is permanently an international market opened because of the time differences of the various spindles.
Indeed, when one of the buoyant markets, there remains always at least one of open, what allows the investors of the whole world of trader day and night. But then why it is so important to know the schedules of the various markets?

The schedules of the various markets:

Let us begin by interesting us in the schedules of trading of the various markets Forex of the world in the chronological order in which they open. Let us note that the indicated schedules correspond to those of the French time zone, or UTC / GMT.

The first market to be opened is the Australian market which begins at 10 pm and closes at 06 am. it is followed by the market of Tokyo, from midnight till 08 am. The market of Singapore and Hong-Kong comes then which open from 02 am till 10 am, then the market of Frankfurt from 07 am to 3 pm, the market of London, from 8 am to 4 pm and finally, the market of New York, open from 1 pm until 10 pm.

By looking at these schedules closer, we notice two things. The first one is that there is very permanently at least a market opened during 24 hours(12 pm), and the second, that there are several moments of the day in the course of which several markets are opened at the same time. Indeed, between 1 pm and 5 pm, the markets of New York and London are opened at the same time, between midnight and 07 hours, it is the Australian and Japanese markets which are simultaneously opened, and between 08 am and 9 pm, the of London and Chinese markets are also opened at the same time.

Why is it so important to know the opening hours of these markets?

As you know certainly, the trading of the currencies can be quickly profitable thanks to the leverage proposed by the brokers and which allows increasing considerably your earnings with small variations of court. But the most frequent error at the beginners is the trader at any time of the day, without taking into account open markets or not. Although it is not obvious, these traders often limit their earnings because they do not take advantage of the best moments for a trader.

Indeed, to become an effective trader Forex, there is necessary before any knowing how to take advantage moments of strong volatility are moments in the course of which the courts evolve with the strongest amplitude. The more the exchanged volumes are important, the more the reaction of the investors will be massive and thus more the courts will quickly move. Yet, so that these volumes are important, the traders should be many to invest at the same moment.

The most interesting schedules for the trader on Forex: 

after what we have just seen, we understand easily that the best schedules for the trader on Forex are the hours in the course of which several markets are simultaneously opened.

Therefore, it can be inferred that the most convenient moments to make important profits on the currency market are on one hand of 13 hours at 5 pm, especially if you trade on the pairs of currencies directly concerned by these markets, that is the EUR/USD, the GBP/USD, and the USD/CHF. Other most interesting time slots to speculate live on the foreign exchange market is between 06 hours and 08 o'clock in the morning or still between midnight and 03 o'clock in the morning, even if these schedules are a little bit complex for the French traders.

Advantages of the foreign exchange market:

As we indicated it to you an introduction, the forex currency market is a very advantageous market for the traders because of:

Its strong liquidity

It is possible to invest small sums as big sums and up to several million dollars on this market because of its important liquidity. The currency market is the biggest market in the world, it counts about 3 000 billion transactions every day. Moreover, the volume of transactions increases every year. The possibilities of fraud are almost impossible what makes it of more very secure, in spite of its accessibility via the internet.

Its continuous quotation

The currency market is accessible 12 pm on 24 during 5 working days a week. It is thus possible to realize transactions there at any time, that implies that we can react very quickly to an event or any current events, what is not the case for the other stock markets for example which are governed by strict opening hours.

An accessible market

For trader on Forex, you do not need to move. By means of the internet, you can directly trader by registering you on platforms of trading put at the disposal free of charge by all the online brokers. The fact of passing by the platforms of online trading has for advantages to reduce the expenses of transactions because it has here no real intermediary. You act directly on the market simply thanks to the platform which realizes the actions(shares) for you. These platforms also have an important advantage for the small investors, it is possible to open " mini count ".

Its leverage

When we trade on the currencies, we can take advantage of a leverage which multiplies by a coefficient from 100 to 400 the amount of the earnings, but also that of the possible losses.

Its reduced expenses

Most of the intermediaries who allow of the trader on the foreign exchange market take no committee(commission). They pay by means of a spread which corresponds to a slight difference between the real price of the pair of currency and its price of sale or purchase.

The broker's Forex to buy and sell online currencies:

The best way to speculate on the online currencies is undoubted to pass by a broker Forex, that is an online broker specialized in this sector. These brokers put at the disposal of the traders a platform of simple trading, allowing to cross orders of purchase and sale of the home, with a simple computer connected to the internet.

The only approach to be made to begin to buy and to sell online currencies consists in registering you with this broker by creating your account of trading, and to make the first deposit on this one.
You will have then access to the platform of trading of this broker and to all his features as graphs, various orders, and help tools

To what is of use the spreads of the brokers Forex?

If it is true to say that the broker Forex charges no cool of transaction, there is logically a way for them to pay for the service which it returns you by allowing you to reach the foreign exchange market.

It is thus the spread which represents the real cost of your transaction. However, the cost of this spread is often very low and widely lower in every case at the expense of brokerage and than the margins practiced on other financial markets as the stock market. But when we add all the spreads taken in one day by these brokers from all the realized transactions, we manage to imagine a comfortable income.

We distinguish generally two types of spreads different, the fixed spreads and the variable or floating spreads, which vary according to market conditions. 

All the brokers do not practice the same level of spread and use this argument as a commercial argument to distance itself from the competition. With the strong competition which knows at present the sector of the investment Forex, the brokers practice more and more low spreads.

Naturally, the spread also varies of a pair of currencies in the other one according to the liquidity and to the level of risk.

Choose the best broker according to spreads:

When you observe a platform of trading Forex, you observe that for a pair of currencies, two prices are posted. We indeed distinguish Bid or sale price and Ask or purchase price. It is exactly the gap between these two prices that represent the spread taken by the broker.

If it seems obvious that a broker practicing low spreads will be more interesting than another one, it is, however, necessary to be wary you too attractive price lists. Indeed, the spread being essential in the remuneration for the brokers, too low spreads can hide other expenses non-mentioned as expenses on retreats.

It is also necessary to avoid as far as possible the variable or floating spreads because the brokers are the only ones to decide on the evolution of the latter and can thus make an excessive use of it on certain market conditions to their advantage. When you will be registered on the platform of trading of your choice, you cannot only support these levels of spreads and will risk spending more on your transactions(deals) that of what you thought at first.

How to buy and to sell online currencies?

Let us be now interested more in the way the online currencies are sold themselves and are sold. The foreign exchange market has, indeed, a behavior different from that of the other markets for stock markets. It is not anymore a question here of speculating on the price of an asset(active person), but rather on the price of a pair of currencies, also called " cross of currencies ".

This "cross" thus represents the association of two currencies (for example EUR / USD) the position of which is determined in a subsidized way. The dollar American will be placed for example always in the second position. There are however certain exceptions.

The basic currency (or currency in certain) is situated to the left and its value is always 1. Only the right value varies according to the market (we call it then currency to the uncertain). The parity represents here the value of the currency to the uncertain with regard to the currency in certain.

It is thus important to understand that to buy of the EUR / USD means buying of the euro while to sell of the EUR / USD means buying of the dollar.

For example, in the cross EUR / USD, the price expresses the exchange rate from the Euro to US dollars. If this price is 1.50 pips, it means that a euro is equal to 1.5 dollars.

By buying or by selling a pair of currencies, you thus bet on an increase or a reduction in this price. Let us imagine that you take a stand in the purchase on the cross EUR / USD during 1.50 pips at the rate of 100€ and that you use a leverage of 1 200. If you resell your pair of currencies during pips 1.60, you thus gain(win) the difference of pips, multiplied by the amount of your investment and by the leverage, or: 0.10 x (1 00 x 200) = 200. You thus gain 200€.

Some advice to make a success of his(her, its) trading of currency market:

To make a success of your trading of foreign currencies on Forex here is some advice to be followed:

  • Prefer the currencies the most known as the euro, the dollar or the yen.
  • Take time to realize technical analyses by studying graphs.
  • Do not place all your capital on one and the same position.

Why follow the live forex exchange rate?

Even if you will not naturally be to bring to bet on the crosses of the currencies at any time of the day, especially if the trading is a complementary activity and what your work occupies you full-time, have the possibility of following directly the evolution of foreign exchange rates present advantages.
Indeed, by following the trends in due course, you can anticipate the good opportunities and take a stand at the best moment.

How to reach during the live currencies?

There are various solutions allowing to follow the live forex exchange rate. You can use in particular sites specialized in the finance, or more simply graphs were given by the brokers CFD.
Indeed, on most of the platforms of trading, you will find real-time graphs also available on Smartphone or tablet.

The pairs of main currencies of the foreign exchange market:

On the forex currency market, two types of pairs of currencies are considered as the main sources of speculation. We indeed distinguish the pairs of said currencies "adults" of the pairs of currencies associated with raw materials. The latter has the peculiarity to be very widely influenced by the evolution of the prices of certain raw materials which represent the main revenue stream of the broadcasting(issuing) country.

The pairs of major currencies are attractive because of their strong liquidity and thus represent currencies very exchanged in the world by the way in particular of the international trade. Among the most popular, we shall hold the EUR / USD, the USD / JPY, the GBP / USD and the USD / CHF
The currencies associated with raw materials are as for them interesting because it is easier to plan their evolutions. It is mainly about crosses AUD / USD for the goldUSD / CAD for the oil and the NZD / USD also for the gold.


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