Beginners Forex Trading
Now, with just a click of the mouse, you, too, can take advantage of the unprecedented liquidity and profit potential of the online financial market. No commissions, no hidden fees, no middlemen—it’s no wonder so many enthusiasts are now choosing to trade online!
OK, how do I get started?
You’ll need to learn a few simple, easy-to-understand terms and concepts before getting started. Take some time to master these basics, for they are the building blocks of any trade.
Forex History
On August 15, 1971, President Nixon announced that the U.S. would no longer exchange gold for U.S. dollars. Five years later, in 1976, nations permanently abolished the gold standard, opening the floodgates to a market that now generates 4 trillion dollars—daily!
What are Pips?
Short for “percentage is point,” a pip is the smallest unit of change in a traded currency pair. Most of the major currency pairs are priced to four decimal points, meaning that the smallest unit of change is the fourth number after the decimal point. By way of example, imagine that you bought the EUR/USD at 1.4652 and sold it at 1.4689. That’s a movement of 0.0037, or 37 pips. You just made money!
What is Leverage?
Also called “trading on margin,” leverage is a loan from your broker. Traders use leverage to control large amounts of a currency pair, a commodity, a stock, or an index with a comparatively small amount of capital. Say, for example, that your broker offers you 100 to 1 leverage: This means that you will be able trade $100 for every dollar in your account.
What are the Major Currencies, Commodities, and Indices?
| Currencies | Commodities | Indices |
| US Dollar: USD, Buck Canadian Dollar: CAD, Loonie Swiss Franc: CHF, Swissy Euro: Euro, Fiber Japanese Yen: JPY, Yen British Pound: GBP, Sterling Australian Dollar: AUD, Aussie |
Gold Oil Silver |
Dow Jones Industrial Average Standard and Poor’s 500 NASDAQ |
What is a Forex Spread?
A Forex spread is the amount of pips between the Bid and Ask prices on a trade. For example, if the USD/CAD has a bid price (the buying price) of 0.9854 and an ask price (the selling price) of 0.9850, the spread would be 0.0004, which is equal to 4 pips.
How do I Read Forex Charts?
Forex charts contain all manner of useful information. Your personal trading coach will teach you how to utilize these charts to your trading advantage. For now, keep in mind that the three most crucial pieces of information on any Forex chart are price, time and volume.
What is a Forex Position?
When you open a Forex position, you are either buying or selling an underlying asset: a currency pair, a stock, an index, or a commodity.
What do Stop Loss, Take Profit, and Limit Orders mean?
Stop Loss, Take Profit, and Limit Orders are three of the most useful tools in the Forex market. By using them correctly, you will be able to maximize profits, minimize risk, and better control your trade. All three orders are set up before you place your trade.
When you set up a Stop Loss order, you are telling your broker to close your position should your losses reach a predetermined level.
When you set up a Take Profit order, you are telling your broker to close your position should your profits reach a predetermined level.
When you set up a Limit order, you are telling your broker to buy or sell an underlying asset (a currency pair, a stock, an index, or a commodity) when it reaches a specific price.
How do I Lower Risk?
No matter what your level of trading experience, all traders should obey the first commandment of trading: Trade with a Plan. Our personal trading coaches will help you find the trading strategy that works best for you!
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