Forex (foreign exchange) is the market where traders buy and sell currencies around the clock – 24 hours per day, five days a week – in an international marketplace that never closes its virtual doors. Forex offers traders immense potential gains as well as risks. It can offer both profits as well as losses.
Conduct your research carefully when selecting a broker and learning about risk management and trading strategies.
Scalping
Scalping is a fast-paced trading strategy that can be very lucrative. However, it does carry its own set of risks and requires a certain type of trader able to quickly process large volumes of data and keep pace with markets.
Forex scalpers look out for small price movements, known as pips, to make quick trades using statistical strategies such as time, price, day of the week or chart patterns.
Market volatility allows scalpers to maneuver in and out of positions quickly. A scalper might open and close long positions multiple times an hour in order to buy pairs at ask prices before closing them in order to buy at bid prices, thus crossing the spread multiple times over.
Trend trading
Trend trading can be one of the most profitable means of making money in Forex. It involves purchasing when prices rise and selling when they decrease – though it’s essential to follow trends carefully to avoid being duped into an uninformed trade or misleading one.
Trends can be identified on charts by a series of higher or lower highs and lows that move together, making a steady climb upward or a steady decline downward. To identify them more quickly and reliably, traders can draw a line connecting these highs and lows – known as trend lines – as an easy way to confirm them with other indicators like moving averages (MAs) and volume readings.
Traders must also consider the duration of trends when trading. Long-term trends generally last more than a year while short-term ones typically don’t last more than three weeks.
News trading
News trading in Forex trading can offer lucrative profits. This strategy involves placing trades before, during, or after major news events which typically have a strong influence over currency pairs (especially economic ones) so traders must understand how to interpret and anticipate such movements in order to take full advantage of it.
Though trading news can be risky, traders must remain mindful of slippage – the difference between expected price at which an order was placed and executed price – due to rapid market movement or news events with significant volatility. Furthermore, traders should establish a risk-management plan in place that protects them from severe losses; such measures might include using guaranteed stops or decreasing trade size.
Margin requirements
Margin is the portion of your account balance that forex brokers set aside and hold when opening trades in order to safeguard them against potential losses from those trades, protecting themselves against possible future trade losses from your trades. Margin requirements differ depending on both forex broker and currency pair.
Maintaining an optimal margin level above 100% to avoid margin calls or automatic liquidations by your broker. Calculating your margin level requires dividing equity by used margin; as the higher your level is, more funds will be available to open new trades allowing larger positions with greater leverage while simultaneously decreasing risk. Although trading on margin involves greater risks it may not be suitable for everyone investors.
Trading platforms
Trading platforms provide traders with access to the market. They offer various features, such as charting software and news feeds. You can use a trading platform to place trades and monitor your account; however, success in Forex trading ultimately lies with individual investment choices, experience level and risk appetite.
Numerous brokers offer their own proprietary platforms, which vary in quality but tend to be web-based and user-friendly for beginners. IG, for instance, has their IG Trader proprietary platform as well as mobile applications for trading over 80 currency pairs.
IG is widely recognized for their superb customer support services, such as phone and live chat support. Their staff can answer any of your inquiries Monday – Friday and are more than willing to assist with any problems you might be experiencing.
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