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FOREX & CFD TRADING TUTORIAL | WHAT IS FOREX?

First and foremost, allow us to answer one fundamental question people who haven’t traded before are bound to ask – what is forex? Well, linguistically speaking, the word forex is made out of two other words: foreign exchange. Foreign exchange is a term denoting exchange of different currencies for one another and this market is the largest market in the world when it comes to finances because the need to perform currency conversions is present every hour of every day everywhere in the world. Different countries use different currencies, but these currencies do not have a fixed value and can fluctuate significantly, depending on the economic situation in the world or in the country using them. This opens up a lot of space for trading because you can profit from buying a currency when its value is low and selling it when it recovers. The possibilities are extremely numerous, so let’s continue our forex & CFD trading tutorial with another very important topic.

FOREX & CFD TRADING TUTORIAL | FOREX EXCHANGE RATE

Like we said earlier, the value of a currency is not fixed and we use forex exchange rates to show this. Basically, this is one currency expressed through some of its counterparts. For example, as we are writing this text, one US dollar is worth 111.91 Japanese yen or 0.8862 euro. From this, you can calculate the relationship between the euro and the Japanese yen and the same principle applies to any two currencies. This is what currency exchange is based on – tomorrow the US dollar may drop below 111.50 yen, for example, or it can go up, which will, in turn, result with a trader’s profit or loss. What you as a trader have to do is find out how the currencies will behave and then invest with the goal of making a profit. The profit may not come immediately because a currency may drop before it rises up again, but if you have reliable information you don’t have to worry. Want to know how to acquire this information? Stay with us, the answer is just below, in the next paragraph of our forex & CFD trading tutorial!

FOREX & CFD TRADING TUTORIAL | METATRADER 4

All data concerning forex trading is displayed on your trading platform, a piece of software designed to keep track of numerous forex pairs. Every broker you approach will have it, but none is more famous and more widely accepted than Metatrader 4. This platform offers an abundance of tools and indicators which is what you use to analyze your chart and make a prediction about an asset. Thanks to this, you can approach the market in numerous different ways and come up with various different strategies to help you invest. Everything, including charts, is fully customizable, so every trader can have a unique experience completely attuned to their trading style. Of course, mt4 also has a mobile version, so you can trade while on the move, too. There is also a newer version of this platform called Metatrader 5, but it seems that traders still prefer the classic over the upgraded version. But why exactly is all of this important? Well, that requires a separate paragraph. Keep reading our forex & CFD trading tutorial and find out!

FOREX & CFD TRADING TUTORIAL | TECHNICAL ANALYSIS

The market often repeats the same patterns of behaviour, so if you can predict what will happen next you can also make the right investment decision. The tools we mentioned in the previous paragraph help you do just that. Analyzing the chart through them is what constitutes the so called technical analysis. Given how many factors can affect the global economy, you need all the help you can get if you want to strike it rich. However, this is not an impossible task and with a bit of practice you really can make lucrative investments. Patterns and trends are what you’re looking for in technical analysis and this is all based on statistical data. The tools you use here help you visualize everything on your chart, which in turn allows you to react quicker. You have to keep in mind, though, that unpredictable market events can happen, which can affect your trades. Because of that, no analysis can guarantee a positive outcome 100% of the, but it can help you become profitable, which is what counts at the end of the day. However, there are more things you can use to your advantage, so stay with our forex & CFD trading tutorial a bit more.
 
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