The Forex market is one of the largest and most volatile financial markets in the world, which has many profitable opportunities. But to succeed in this market, only motivation and capital are not enough; Rather, it requires knowledge, correct strategies and risk management. Many novice traders enter Forex with the hope of making a quick buck, but success in this market requires patience, careful analysis, and following certain principles.
In the article, we will examine the basic steps to become a professional and successful Forex trader.
What is forex and how does it work?
Forex is the world’s oldest financial market where currencies of different countries are traded. The daily trading volume of this market is more than 7.5 trillion dollars and, unlike traditional stock exchanges, it operates without a central exchange or special regulatory body. In forex trading, currencies are traded in pairs, that is, one currency is bought and another currency is sold at the same time. For example, in the EUR/USD currency pair, the euro is the base currency and the US dollar is the quote currency. An increase in price indicates a strengthening of the euro and a decrease in price indicates a strengthening of the dollar, and vice versa.
What are the benefits of working in the forex market?
Forex is a decentralized market whose transactions are done electronically through a network of banks and brokers. This market is active 24 hours a day and traders can trade at different times and places. Leverage allows traders to take larger positions with less capital, but there is also the risk of larger losses. Also, transactions are done in currency pairs, which gives traders more opportunity to analyze and make decisions.
If you are interested in working in this attractive and profitable market and earning dollars from it, Forex professional training read the
How to trade in forex?
Trading in the forex market can be an exciting and profitable experience, but it is necessary to learn the basics of operating in this market and follow the trading steps. These steps are mentioned below.
Choosing a reliable forex broker
To start trading in the forex market, you must register with a reputable broker. A broker acts as an intermediary between a buyer and a seller and provides a platform for you to make your transactions. To choose a suitable broker, you must List of the best forex brokers Check and choose the final option according to your needs.
In this selection, be sure to check the following features about each broker:
- Supervision and regulation: Make sure the broker is regulated by a reputable regulatory body (such as the FCA in the UK, ASIC in Australia or the NFA in the US).
- Trading platform: Look for user-friendly platforms like Metatrader 4 or 5 or dedicated platforms that offer advanced features and tools.
- Types of trading accounts: Different brokers offer different trading accounts with different deposits and conditions according to the needs of users. Check the variety of accounts to make sure the broker offers an account that matches your conditions and capital.
- Fees and spreadsBefore choosing a broker, be sure to compare spreads (difference between buying and selling prices) and commission fees.
- Customer support: Check if the broker offers responsive customer support services through multiple channels (live chat, email, phone). Brokers like AlpariAmarkets and Liteflan have Persian website and support.
Opening and setting up a trading account
Registering in Forex Broker includes filling out the form with personal information, sending identification documents, choosing the type of account (demo or real), depositing money and confirming the account. To start trading risk-free, it is recommended to first practice with a demo account to fully learn how the platform works and your trading skills.
Learn the basics of forex
To be successful in the forex market, you must learn the basics of operating in it and gain knowledge of the trading strategies of this market. Below are some key concepts:
- Currency pairs: Understand how currencies work. The first currency is the base currency and the second currency is the quote currency (for example, EUR/USD means you buy euros and sell dollars).
- Pipes: A pip is the smallest price change in forex trading. For most currency pairs, the pip is usually the fourth decimal place (0.0001).
- Spreads: The spread is the transaction cost of a currency pair, which is calculated as the difference between the bid (ask) price and the bid (bid) price.
- Leverage and margin: Leverage allows you to take larger positions in the forex market with a smaller amount of capital. For example, with a leverage of 1:100, you can have $100,000 in capital with $1,000. However, this increases both potential profits and risks.
Creating a trading strategy
To trade successfully in the forex market, you must have a clear trading plan. This program has several main parts, which are:
- Financial goals: Determine what you want to achieve. For example, you may aim to earn a certain amount of profit per month or achieve a certain return over the course of a year.
- Risk tolerance: Determine how much risk you accept for each trade. Usually 1% to 2% of your trading capital is the best result.
- Trading strategy: choose your approach; Scalping (short-term transactions), day trading (holding positions during a day), or swing trading (holding positions for several days) are among the trading strategies in the forex market.
- Entry and exit rules: Define criteria for entering and exiting trades based on your analysis. These criteria usually include technical analysis (such as identifying support and resistance levels) or fundamental analysis (such as economic and political news).
Selection of currency pairs
The selection of currency pairs is another important aspect of the trading program. This choice should be made based on your market analysis and trading strategy. First, focus on major currency pairs (such as EUR/USD, GBP/USD or USD/JPY) that have high liquidity and low spreads. These currency pairs are less risky than exotic currency pairs (which include lesser-known currencies with higher volatility).
Execution of transactions
In the next step, you enter the execution of transactions and you must consider the following points:
- Choose the size of the deal: Determine the number of units of the desired currency pair based on your account size and risk management rules.
- Select order typeYou can set your order as a market order, limit order and stop-loss:
- Market order: It is executed immediately at the current market price.
- Limited order: You set a specific price at which you want to enter or exit the trade.
- Limit loss order: The broker automatically closes your position at the expected loss level to manage the risk of price volatility.
- Follow the economic calendar: Before you make your trades, be aware of upcoming economic events that can affect market volatility.
Monitor transactions
To proactively manage trades, regularly check the status of your open positions and react to market changes. When prices move in your favor, place stop-loss orders to preserve your profits. After each trading session or week, analyze your performance and identify your strengths and weaknesses by keeping a trading log to become a more experienced trader.
Source: https://khanesarmaye.com/forex/
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