For most people, foreign exchange trading is only dabbled upon by large financial institutions, over-rich people, large companies, and the banks. The belief that it is complicated is true mostly because predicting the money market directions is simply confusing.
Many Traders Make Lots of Money!
However, once you become proficient in all levels of foreign exchange trading, generating profits can really be as easy as pie. Of course, losses every now and then are all part of the game but professional traders have already found the knack in what they do, minimize shortfalls and increase earnings.
Forex – Currency Trading
You are probably familiar with shares and stock trading but online currency trading is totally different from these two. With stock trading, you have to monitor thousands of companies and the movement of their shares while you only have to deal with the major currencies in online currency trading. The hottest currencies include the Japanese Yen, British Pound, the Canadian Dollar, Australian Dollar, Us Dollar, New Zealand Dollar, Swiss Franc, and the Euro. This types of currencies trading can be done at a large number of trusted online platforms such as the MYfintec platform which has become extremely popular this year.
There are other currencies at play but these are the most popular moneys and they are traded every single day. To join the online currency trading, you have to register online and set up an account with the online foreign exchange trading company of your choice. You would be surprised to know that there are a lot of them so be very careful on how you select your broker. Check their trading platforms and see if it matches your preference.
After you have set up an online currency trading account, the next thing that you have to do is infuse cash to your account and begin trading. The usual money transfer agent is through credit card or bank transfer but some allow wire transfer and other viable money transfer options.
Do not get too excited when trading because all your money can disappear in a matter of minutes with gut feel and the worst trading decisions. It is advisable that you practice first using your agent’s dummy account. Most online brokers will provide you a demo account for free so that you would be able tom practice trading without using actual cash. With demo accounts, you get to trade with virtual money using real-time charts and price quotes. This would be a huge advantage on your part most especially if you have not had any experience with online currency trading.
Study well and learn from the experts on how to successfully act in the online currency trading game and you may find yourself earning huge profits immediately.
Learn forex terms before engaging to an Online Currency trading
Online currency trading allows you to do forex trading with the use of your computer and internet connection. All you need to do is make your schedule and trade currency anyhow you like it.
To have a better understanding of currency trading, you must know and learn common terms used in forex trading. When you are familiar with the terms and language of forex trading, you can be sure that whatever gain or loss you registered is based on your knowledge of the currency trading.
Traders buy and sell currency with a goal to make profits. BID is the buy price while the sell price is tagged as ASK. The difference between the two currency prices is the SPREAD. This is what the market gives and takes in selling or buying the currency. For example, the EURO/USD bid/ask is 1.220/1.225, the market maker give 1.22o when buying from a trader but takes 1.225 when selling to a trader. The spread determines whether the trader would make gain or loss because exchange rates changes quickly.
How fast the traders react to the quick change of the exchange rate also determines how much they will gain or lose.
When dealing with the currency price, you are dealing with QUOTE. There are two variations of quotes such as direct quotes and indirect quotes. Since most currency are quoted against the US dollar, direct quote is the price of one US dollar in terms to any another country currency while indirect quote is the unit price of a currency against the US dollar. The quotes dictate the deal that will be made with which is oftentimes can be in real time or delayed indication. Online currency trading users have real time quotes which enables the users to an easy trading based on quotes.
Currency trading is always done in currency pairs. The dominant currency base in online currency trading are Euro (EUR), British Pound (GBP)and US Dollar (USD). The currency pair comprises one base currency to another currency like EUR/USD, EUR/GBP, and USD/JPY. GBP/JPY, GBP/USD.
The key to a successful currency trading lies in selecting the currency pairs you would be trading. You can start with one or two pair for a start and once you gain your confidence, taking more pairs will be smart moves. However, smart traders also stick to a limited number of pairs to ensure their profitability.
If you are intending to try your luck on online currency trading, make sure you have familiarized yourself with the basic terms used in forex trading to give your luck a better position to work well.