What is Forex?
“Forex” stands for foreign exchange; it’s also known as FX. In a forex trade, you buy one currency while simultaneously selling another – that is, you’re exchanging the sold currency for the one you’re buying. The foreign exchange market is an over-the-counter market.
Do and Don’t in Forex Trading
Forex trading is generally referred to as an exchange of currencies or what is commonly known as Foreign Exchange. It is not a game of bet like that of balls gaming or pony racing. This is a rewarding business which is open online 24/5 and is an outstanding method for making quick cash. In no time traders can reap the fruits of good trade by timing their trade wisely. Just as in other businesses, a new Forex trader too has to follow certain do’s and Don’ts to become successful in his business.
1. A new forex trader who is all set to begin trading in the market should be ready with a trading plan. The pillars of successful forex lies with sound knowledge and understanding of the entire Foreign Exchange Trade Lifecycle.
2. In order to give a smooth start to their trade business, one should keep in mind the present monetary market scenario and study the dynamics and conduct basic research related to forex trade.
3. A new trader should always begin his trade at a time when the market shows a progressively growing or down
4. Prior to beginning a currency trade, he should always keep in mind the gain and loss ratio.
5. Having a sound knowledge on the Fibonacci Analysis will help a trader to choose the best time of his entry or exit for starting a trade as it enables them to foresee the market fluctuations.
6. A detailed technical and fundamental study of the current trading patterns by using charts, continuation patterns or trend reversal will be beneficial for a new forex trader.
1. A trader should be patient and should avoid impulsive decisions.
2. They should not make hasty decisions in order to earn profits, but instead should gradually learn the trick of trading. A forex trader who is not sure about the market trends should not risk their present capital
3. A trader should avoid indulging in trades during inactive market hours as this may incur heavy loss.
4. It will be unwise for a new trader to trade with all his deposit,particularly when he does not have proper understanding of Forex trade. Even a small movement of the market will make him loose all the money on his deposit. You have to trade with the adequate amounts of money to minimize the risks.
5. Being greedy in this form of trade is a big no.Emotions and feelings should be kept apart. Doing trade business primarily based on market feelings is not considered a wise practice.
6. For a reliable trade, traders should avoid entering into currency trade, particularly when bars represented in the charts look unstable or are dipping. You should enter to the market carefully and realize your actions.