What is Forex Trading?
A global trading platform for you to exchange your home currencies with international currencies is what is called Forex Marketplace. Simply said “Foreign Exchange” Market Place or Forex Market Place.
Because of globalization, the Forex market happens to be the largest exchange platform worldwide.
This market plays a very significant role. Exchanging currencies from one to another, may not seem too important to a lot of people. But in reality, without a definite and acceptable way of exchanging currencies, trade internationally cannot happen.
You cannot be buying yourself products from other countries. And other countries cannot be buying from you.
A Forex Trading market is not as complicated as it sounds. Even a beginner or a newbie to the world of forex trading can trade with a small amount of deposit. This is because of its smoothness in accessibility.
Working with Forex Trading?
There are certain things you must first know before you start trading on this platform.
Every transaction occurring on a Forex marketplace requires two currencies to be exchanged together. The two currencies are so called, base currency and quote currency. Every currency comes with several pairs for exchange. Base currency happens to be the first currency that appears as a forex pair and quote currency the second one.
The price at which a trader is willing to sell a currency
The value at which a trader will be willing to buy a currency
Cost of trading or the difference between the bid price and ask price
Or point in price is the measure of change in a forex pair between the two currencies. The acronym extends to “percentage-in-point”.
The currency market deals in lost unlike share market
It helps you take large positions against small collaterals
HOW PROFITABLE CAN FOREX TRADING GET?
Currency trading provided the margins stay as they are can be really profitable. Unless the market starts moving in the opposite direction. If so happens it can literally wipe out a trader’s account. But then again, like every other trading, it is bound to have some risk involved.
But yes, yet again it is considered as one of the most profitable side hustles.
FOREX TRADING IN INDIA
Knowing the right things about the forex market will be beneficial for you.
Is Forex Trading Illegal In India?
As contrast to popular belief, forex trading in India is legal up to a limit. You can legally only trade Indian currency and within pairs available with Indian currencies. Beyond which, trading is purely illegal in India. Furthermore, to start trading with an online broker is illegal in India and a pure offence.
Finding the Right Forex Trader
To begin trading in the Forex market in India, the first and foremost thing you need to do is get in touch with a genuine forex broker. This isn’t as simple as it sounds. Finding a legitimate forex broker is similar to looking for a needle in a haystack.
Go on the Internet and Get the work done
Next, you go on the internet and open a forex trading account, whilst making the initial deposit.
Forex trading as said can surely be profitable with very less initial investment.
A BEGINNERS GUIDE TO TRADING IN A FOREX MARKET
Being a successful trader at Forex Market totally depends on you. How you perceive the market and how well you can use your abilities. As funny as it may sound, succeeding at the Forex market also depends on your emotional stability. How well you can stay calm, deal with ‘fear-of-missing-out’ and take the right decisions at the right time.
Choosing the ideal time frame for you
Time frame is the time window for your trading activity. Your trading activity’s time limit decides whether you’re an active or passive user. If your limit ranges in 1 min, 5 mins, to 30 mins or 1 hr. You are an active trader. And if your time limit ranges from 1 day, 1 week to a month or so you are a passive user.
Learn to use Indicators that help you analyze and identify trends
Use around 2 – 5 indicators to help you analyze your trends. Indicators such as MACD, Ichimoku, RSI, ADX, Stochastic, etc.
Identifying YOUR risk Factor
By a general rule of trade, you must be willing to risk only 1-2% per trade. Identifying your risk factor means, how much of your invested money are you willing to risk. It could be 10% or 20% of your total invested amount.
Risk/ Reward ratio
By general rule, the risk/reward ratio should be ⅓ or ¼ but depending on what you expect to gain from your trades this may change. The simplest meaning of this ratio is the amount of reward an investor can expect to gain to every 1 USD risk he has taken. This ratio will also help you analyze expected returns on every risk you take.
Your Rules Your laws
Like I said if you control your emotions well you can ace this. The rules you lay down for yourself should be your laws. Don’t break them. No matter how excruciatingly painful times get. They have been amazing traders who have shifted from their laws despite being extraordinarily amazing traders and suffered losses. Let’s avoid that.
Now that you have a thorough idea of what’s and how’s I am sure you can build an amazing systematic forex trading system for you. It may seem simple on the outside, but to be very honest it isn’t since without a basic foundation your system will not function.
We understand your goal and desires to succeed, but you must remember to not be overconfident or greedy. This will not function without a realistic approach and so practicality is important.
This article has been written with the aim to make it as simple as possible for its readers to read. We hope that you come across all the relevant information you need. And are ready with an amazing plan to succeed!