Forex Trading For Beginners – Learn Forex Trading

Forex trading is a huge market. Billions are traded in foreign exchange on a daily basis. Whether you are an experienced trader or an absolute beginner, finding the best forex broker and a profitable forex day trading strategy or system is complex. So learn the fundamentals before choosing the best path for you.

What is the forex market?

Foreign exchange (also known as forex or FX) refers to the global, over-the-counter market (OTC) where traders, investors, institutions and banks, exchange, speculate on, buy and sell world currencies.

Trading is conducted over the ‘interbank market’, an online channel through which currencies are traded 24 hours a day, five days a week. Forex is one of the largest financial markets, with an estimated global daily turnover of more than US$5 trillion.at is the forex market?

forex-trading

How to Trade Forex

Breaking down Forex Trading

Forex trading is one of the most popular types of trading there is in the financial field. Currencies hold a certain degree of importance to almost everyone in the world, whether they are aware of it or not. This is mostly because currencies are the medium being used in order to conduct foreign trade and business.

Forex trading can already be seen in a person’s daily life. For instance, if you wish to buy a product from a foreign country you would normally go to a store near you in order to purchase or order it, right? But for that to be possible, the store would have needed to import the goods from that foreign country.

During this transaction, the money you used to buy the product, which is in your local currency, would need to be exchanged to the equivalent value of the foreign country’s local currency. This exchange could be between U.S. dollars (USD) and euros (EUR) or any other currency pairs found across the globe.

There is no central marketplace where foreign exchange is being conducted. The trades are being completed electronically over-the-cou

nter or OTC. This means that all trades are conducted through computer networks that connect traders all over the world.

Investors have varying reviews and opinions regarding the foreign exchange market. Other people’s experiences, whether good or bad, can be read in the reviews they write on various forums and websites.

The market is also opened 24 hours a day, five days a week, almost every brokerage firm, like BWorld, offer their services during this time period.

You can easily conduct the trades in major financial centers of London, New York, Zurich, Paris, Tokyo, Singapore, Sydney, and Hong Kong – across almost every time zone. find the best best forex brokers in Malaysia

Why Trade Forex?

The forex currency market offers the day trader the ability to speculate on movements in foreign exchange markets and particular economies or regions. Furthermore, with no central market, forex offers trading opportunities around the clock.

Liquidity – In the forex market there is an average volume of over $3.2 trillion dollars traded per day. So, there is an abundance of trades and moves you can make.
Diversity – Firstly, you have the pairs stemming from the eight major global currencies. On top of that, many regional currency pairings are also available for trade. More options, more opportunities to turn a profit.
Accessibility – The forex market is readily accessible, open twenty-four hours a day, five days a week. As a result, you decide when to trade and how to trade.
Leverage – A significant amount of forex currency pairings are traded on margin. This is because leverage can be used to help you both buy and sell large quantities of currency. The greater the quantity, the greater the potential profit – or loss.
Low commissions – Forex offer relatively low costs and fees compared to other markets. In fact, some firms don’t charge any commission at all, you pay just the bid/ask spreads. True ECN firms may also offer 0 spread!

Currencies Traded In Forex

Major

In the international forex day trading world, the vast majority of people focus on the seven most liquid currency pairs on earth, which are firstly the four ‘majors’:

EUR/USD (euro/dollar)
USD/JPY (dollar/Japanese yen)
GBP/USD (British pound/dollar)
USD/CHF (dollar/Swiss franc)

In addition, there are three emerging pairs:

AUD/USD (Australian dollar/dollar)
USD/CAD (dollar/Canadian dollar)
NZD/USD (New Zealand dollar/dollar)

These currency pairs, in addition to a variety of other combinations, account for over 95% of all speculative trading in the forex market, as well as retail forex.

However, you will probably have noticed the US dollar is prevalent in the major currency pairings. This is because it’s the world’s leading reserve currency, playing a part in approximately 88% of currency trades.

Minor

If a currency pairing doesn’t include the US dollar, it’s known as a ‘minor currency pair’ or a ‘cross-currency pair’. Hence the most popularly traded minor currency pairs include the British pound, Euro, or Japanese yen, such as:

EUR/GBP (euro/British pound)
EUR/AUD (euro/Australian dollar)
GBP/JPY (British pound/Japanese yen)
CHF/JPY (Swiss franc/Japanese yen)

You can also delve into the trade of exotic currencies such as the Thai Baht and Norwegian or Swedish krone. However, these exotic extras bring with them a greater degree of risk and volatility.

Finding The Best Forex Broker for Fx Trading

The “best” forex broker will often be a matter of individual preference. It may come down to the pairs you need to trade, the platform, trading using spot markets or per point or simple ease of use requirements.

Below are a list of comparison factors, some will be more important to you than others but all are worth considering. Details on all these elements for each brand can be found in the individual reviews.

Lowest Trading Costs

Spreads, commission, overnight fees – everything that reduces your profit on a single trade needs to be considered. High frequency trading means these costs can ratchet up quickly, so comparing fees will be a huge part of your broker choice. Inactivity or withdrawal fees are also noteworthy as they can be another drain on your balance.

Trading Platform

The trading platform needs to suit you. Whether you want a simple cut down interface, or multiple built in features, widgets and tools – your best option may not be the same as someone else’s.

Demo accounts are a great way to try out multiple platforms and see which works best for you. Remember also, that many platforms are configurable, so you are not stuck with a default view.

Mobile Trading

Trading forex on the move will be crucial to some people, less so for others. Most brands offer a mobile app, normally compatible across iOS, Android and Windows.

If this is key for you, then check the app is a full version of the website and does not miss out any important features. The download of these apps is generally quick and easy – brokers want you trading. Read more on forex trading signals here.

Customer Service

Is customer service available in the language you prefer? Is there live chat, email and telephone support? When are they available? How high a priority this is, only you can know, but it is worth checking out.

Asset List

Does the broker offer the markets or currency pairs you want to trade? A pretty fundamental check, this one. If you are trading major pairs, then all brokers will cater for you. If you want to trade Thai Bahts or Swedish Krone you will need to double check the asset lists and tradable currencies.

Regulation

Do you want a broker regulated by a particular body – the FCA, SEC or ASIC perhaps? Remember European regulation might impact some of your leverage options, so this may impact more than just your peace of mind. We cover regulation in more detail below.

Spreads Or Commission

Partly covered in trading costs, but the spreads are often a comparison factor on their own.

This is because you are not tied down to one broker. If you trade 3 or 4 different currency pairs, and no single broker has the tightest spread for all of them, then shop around. There is nothing wrong with having multiple accounts to take advantage of the best spreads on each trade. Beware of slippage ‘hiding’ wider spreads too often.

Payment Methods

Deposit method options at a certain forex broker might interest you. Do you want to use Paypal, Skrill or Neteller? Are you happy using credit or debit cards knowing this is where withdrawals will be paid too?

Some forex brokers now accept deposits in Bitcoin or a range of other crypto’s too. Read more about Bitcoin Trader App

Security

Most brands will follow regulatory demands to separate client and company funds, and offer certain levels of user data security.

Some brands might give you more confidence than others, and this is often linked to the regulator or where the brand is licensed. Foreign exchange trading can attract unregulated operators. Security is a worthy consideration.

Demo Accounts

Try before you buy. Most credible brokers are willing to let you see their platforms risk free. Trading on a demo account or simulator is a great way to test strategy, back test or learn a platforms nuances. Try as many as you need to before making a choice – and remember having multiple accounts is fine