Forex market is where currencies are traded. In forex trading you can buy and sell currency to make profits. There are eight major currencies EUR,GBP,CHF,USD,CAD,NZD,AUD,JPY. It always done in pairs for instance EUR/USD, here EUR is base and USD is term. Currency trading is done electronically over the counter(OTC), which involves direct trading with the help of private parties or the broker dealers rather than centralized exchange.
Benefits of Forex Trading
- Open 24/5 – flexible for traders worldwide.
- Daily $6.6 trillion turnovers.
- No manipulation.
- High liquidity and easy entry/exit.
- Low capital requirements to start.
- Profit potential in both rising and falling markets.
Major Forex Terms
- Pip (Percentage in points) refers to the smallest price movement usually 0.0001.
- Spread:- Difference between buy and sell price.
- Leverage:- Borrowed capital to increase position size.
- Lot Size:- There are three lot sizes standard, mini and micro.
- Scalping:- Positions are opened and closed quickly with the aim of taking small profits.
- Day Trading:- positions are opened and closed in a day.
- Swing Trading:- Traders look for highs and lows, then place trades.
- Trend Trading:- Positions are opened in line with overall trend.
- Long term:- Positions are held for a long time for weeks, months or even years.
Choose Right Indicators
- Trend Indicators
- Momentum Indicators
- Volume Indicators
- Volatility Indicators
- Support and Resistance Indicator
Support