Today’s forex trading is recognized as one of the most lucrative ways to make money online. To trade Forex, all you need is a computer with an Internet connection and a Forex broker account. Because the market is open 24 hours a day (5.5 days a week), Forex traders generally operate freely, regardless of location and time. Despite its large daily turnover (nearly $ 2 trillion per day), it is surprising to find that only a few currencies are actively traded: US dollars, Australian dollars, Japanese yen, British pounds, Swiss francs, Canadian dollars and Eurodollars are the main ones. seven.
As a matter of fact in FOREX trading, FOREX is traded mainly in large international banks, even after it opened to the public in 1998. According to the Wall Street Journal Europe, 73% of trading volume is covered by the top ten. Deutsche Bank, which tops the table, covered 17% of total foreign exchange transactions; followed by UBS in second and Citi Group in third; occupies 12.5% and 7.5% of the market. Other major financial collaborations on the list are HSBC, Barclays, Merril Lynch, JP Morgan Chase, Coldman Sachs, ABN Amro and Morgan Stanley.
For the market participants segment, approximately half of the transactions were strictly between dealers (ie a bank or a large currency trader); others are mainly between dealers and non-financial institutions.
In practice, traders often use one or more than one online Forex trading system / software. This software is often bundled when you open an account with Forex brokers. In short, here’s how this software works: Forex trading software is connected to the broker’s system via the Internet, currency prices are updated live, and you make your call to trade through the software. Such trading software often requires minimal computing power, so it can run on most home computers today, as long as it is connected to the Internet.
Some basic things you will see in most Forex trading software:
1. Exchange rate window: Display the prices of currency pairs with live updates. Usually the market low will be displayed in this window as well.
2. Open the Positions window: Display the number of tickets (trade) you have purchased. Basic information such as ticket number (trade reference number), trade amount, currency, open positions, current closed position and orders are usually displayed in this window.
3. Closed Position Window: Show the number of tickets (trade) you have sold. Good trading software will show you a summary of your trade in this window, for example, gross profit / loss, open / closed positions, trading amount, and interest amount.
4. Account window: A window showing your overall status. The cash balance on your account, the balance in equity, the daily profit / loss, your total profit / loss, usable margin and real capital. Monitor the usable field in this window. Always maintain a sufficient amount of margins to avoid “margin calls” that force you to close all trades.
5. Automated Trading Orders: Normally, trading order functions are built into Forex trading software. For Forex trading, the stop loss order and the limit order are the two most used functions.
Automated trading orders in Forex trading
As a trader, you can place these orders when you want to buy / sell the currency at a better price than the current market. Limit orders are often used to automatically make a profit when the price reaches a certain level. For example, the current EUR / USD is 1.2693 and your pre-determined limit order is to sell everything at 1.2700. The order will be executed automatically when the price reaches 1.2700.
It is important to learn that limit orders can only be placed at a minimum distance from the current market price. Also, such an order can be canceled or changed at any time by you, as long as the limited price of the order is beyond the minimum allowed distance.
Stop orders, or sometimes known as stop loss orders, are automated orders used to limit and limit open position losses. It can also be used to lock in profits in your trade when the market is moving in your preferred direction.
Stop orders work similar to limit sales orders, they predetermine the lowest selling price for certain transactions. For example, EUR / USD 1.2693 with a stop order of 1.2685, the system will sell your share of USD if the price reaches the level of 1.2685. The price of 1.2685 is guaranteed in this case, which means that even if the market sinks too fast and falls below 1.2685, you can still sell your money at the price you set earlier.
The stop order works perfectly when processing your risk profile. However, it is recommended that the order be used carefully, as it gives the market maker room to cheat your money.
Since the article is intended for beginners in Forex trading, you are probably one of the newcomers looking for some training resources in Forex trading. Obviously, there is no immediate solution to make you a professional marketer. The only answers will be education. Take all the time you need to learn this new trading skill well – practice everything you learn with a demo account before you think about going live with your own money. Seminars, e-books, the Internet, and video courses are all you need to get involved.