Forex Trading is the largest financial market in the world, with more than $ 3 trillion traded daily. This market is based on trading in global currencies .
Forex trading is done by buying or selling “currency pairs” where a trader trades one currency against another. Examples of major currency pairs include EUR / USD, USD / JPY, EUR / JPY, GBP / CHF, CAD / USD and others. When you open a position in the Forex markets, you are placing a “long” position on a particular currency and a “short” position on another currency. There is no specific central location for the Forex market, so it is one of the most flexible and available online trading for all investors from around the world.
difference or similarity between the Forex and stock markets
There are many things that are common to Forex trading , stock markets or other trading markets, but in general, you can say that the Forex markets are trading operations with a shorter life than operations in other markets. Most Forex traders do not leave their positions open overnight, with a fee called “extension fee”. The stock market is much smaller than the currency market, making learning harder.
One of the major differences between the Forex market and equities is also the margin. In Forex, margin is a deposit amount required to keep the position open. This amount is not a fee or a cost on the transaction; it is just a part of your account being set aside as a depositor margin. While in equity the margin can be likened to the first installment that is used to buy shares. Unlike the stock market, the Forex market is not linked to a specific place, but as a trader you can trade anywhere and anytime, whether from your home, your place of business or on your way home. On the other hand, stock markets are centralized. This means they are located in one place such as the New York Stock Exchange (NYSE) where they are entering and leaving all deals.
Finally in the Forex trading , a trader can use automatic execution programs to take positions on foreign exchange making the trading process very easy. In the stock markets on the other hand requires the execution of trading several minutes. It is often easier for a trader to trade Forex rather than stocks, especially if you own a relatively small capital. This is due to the importance of leverage in the Forex market and the ability to track the major currencies closely while in the Forex market you have to analyze each company separately to determine whether they are suitable for investment or not.
Is Forex Trading Profitable?
FOREX trading is one of the most lucrative fields at all, but before you enter this field, you must know that it is a double-edged sword, and with losses like profits, you do not think you win without losing. Most traders lose because they rely on psychological He wished only profit.
The potential returns from trading in Forex markets are almost infinite. Many Forex companies offer a high leverage so that the trader can trade tens and hundreds of thousands of dollars while the capital may be a few hundred dollars in balance. Some companies even have a leverage of 1: 500. Obviously, the higher the leverage, the higher the chances of profit, but with it the loss rates also rise.
Forex Trading is profitable, provided that it is through a trusted, well-known broker and a strong license and a good reputation because there are hundreds of fictitious companies in the world that are focused on the people and hundreds of companies that have been stolen from the Arabs, especially the Gulf, on behalf of the imaginary trading of hundreds of millions of dollars. Therefore, the most important point here is to choose a licensed broker with a strong license, a well-known guarantee and a reputation for good, easy to draw with all the wonderful features.
The most important trading strategies in the Forex markets
Getting started in the Forex trading can be a confusing process. Although these markets are not generally complicated, for a beginner, everything is new and complex. It is important that new traders learn the best trading strategies that can be used in different situations in the Forex markets. Forex traders advise traders to use a particular trading strategy to trade and profit from Forex markets .
Short Buy : In this case, Forex brokers provide the ability for traders to trade more than the value of their accounts. While this strategy is adventurous, it has a higher degree of risk. Therefore, traders should have a clear understanding of the right time to enter and exit a particular pattern, thus reducing risk.
Stop Loss Order : This popular trading strategy enables Forex traders to minimize losses, which depend on price fixing after which positions are closed.
Simple moving rate : The strategy of trading value of a pair of currencies for a predetermined period. Ideally, this trading strategy is created automatically through the Forex trading platform, which is designed to help traders determine the times of sale and purchase based on the currency rate.
Support and Resistance : This strategy is based on identifying certain levels that do not rise or fall below the currency pair’s price. To determine these levels, you should examine the historical data of the currency pair.
It should be borne in mind that these trading strategies are part of a large number of options. The investor must have clear objectives before starting a comparison between different trading strategies. They should know the starting point and the strategies they must use to make profits.