Forex Tutorial for beginners explained by professional fx trading experts, All you need to know about Forex tutorial for beginners. At the end of this Forex tutorial for beginners review if you like it then share it please.
Forex Tutorial for beginners
The term “forex” is a combination of the words “foreign” and “exchange” and refers to the worldwide trading platform of foreign currency exchanges.
The forex trading market is a global enterprise boasting over $4 trillion dollars in average daily trading, which makes it the biggest financial market in the world. Both new and seasoned investors are making a lot of money from this trading platform because foreign currencies are so easy to trade, trades are conducted 24 hours a day on weekdays (only) and this platform gives you access to significant leverage and relatively low costs, fees and/or commissions.
leverage is essentially borrowed money (a loan) from the broker to an investor for the purpose of increasing potential returns on investments. When you see that a brokerage firm offers leverage of 100:1, that essentially means that you can buy an asset that’s worth $1000 while only having an actual balance of $100 in your trading account. You are essentially borrowing $900 from the broker. Higher leverage translates to more buying power for the investor or trader.
Margin Call Policies
Every brokerage firm determines its own margin call policies, which outline the minimum amounts of money (or other security) required to be maintained in your investment trading account. A broker issues a margin call when your balance dips below that minimum required amount. Once a broker issues a margin call, you have to deposit additional money (or other security) into your investment account to bring it back up to the minimum required balance.
Asking Prices, Bids, Spreads
Simply stated, “asking prices” are amounts determined by owners who want to sell assets they currently possess.
“Bids” are the amounts offered by other investors who want to buy an owner’s assets.
“Spread” is the difference between the asking and bid prices or the fluctuation in value of an asset from the time of purchase to the time that asset is sold.
The acronym PIP stands for “percentage in point” (or “price interest points”) and refers to the smallest amount by which a currency quote can fluctuate. With very few exceptions, foreign currencies are traded at 1/100th of a percentage point. A pip is when the difference between currencies fluctuates that one-hundredth of 1%.
For example, if the EUR/USD fluctuates from 1.2250 to 1.2251, the .0001 rise in the value of the USD is considered one “pip.”
Stop losses are designed to limit the losses of an investor. If you place a stop loss order with your broker of 10% below the price you spent to buy the share/stock, this means that you want to limit your losses to 10%. Another means of placing a stop loss is indicating to your broker that you want to buy or sell your share(s) when the price reaches a certain level predetermined by you.
For new investors to financial markets, brokerage firms offer demo accounts from which newbies can practice buying and selling virtual shares of assets with equally virtual money. Demo accounts are free and you can open as many as demo accounts you want to learn to trade forex online free, You can practice trading currencies and shares with a demo account until you become familiar with Forex market.
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Forex tutorial for beginners conclusion
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