Forex trading for beginners: Get Right Guidance and Trade with confidence

Posted by fxtradingcircle on April 9th, 2021

Forex trading which is the act of exchanging currencies is believed to be centuries old dating back to the Babylonian period. Today, it’s one of the biggest international trading markets having access to billions of people trading almost trillion every day. This market never sleeps from Monday to Friday since it is operated digitally across the globe. You can trade here 24 hours sitting anywhere in the world.

Currency pairs are the foundation of forex

Transactions in the forex market involve simultaneous buying and selling of two different currencies. One is called “base currency” and “quote currency”. Both together are called “currency pair”.  For example, when you find a currency pair is written as EUR/USD, here the base currency is Euro and quote currency is the US dollar. The base currency represents how much quote currency is needed to get one unit of the quote currency. So, 1000 EUR/USD, means you have bought 1000 Euros selling an equivalent amount of USD.

Most traded currency pairs

There are seven most traded currency pairs available in the market. These are called major pairs: UDS/JPY (gopher), EUR/USD (fibre), GBP/USD (cable), USD/CHF(swissie), AUD/USD(aussie), USD/CAD (loonie), and NZD/USD (kiwi). The names in the brackets are the nicknames of the currency pairs. In the forex market, no one mentions the currency pairs in detail but call by their nicknames. As you trade in this market you will get acquainted with these names. Apart from seven major players, there are six minor players and six exotic pairs as well. The minor pairs don’t include USD whereas exotic pairs are the pairs made of smaller emerging economies with major currencies GBP/NOK or USD/MXN.

Know the specialized forex terms

There are certain terms in forex having specific meanings and applications in forex trading. The terms like Spread, Leverage, PIP, Margin. Bullish/Bearish, and Lot Size is significant for every trader. So, you have to be familiar with the terms and their applications. In any primary technical support for forex trading for beginners, you will get details of these terms.

Know the Forex charts

Trading in this market is all about to the point analysis of the market. More you understand the market better will be your projection and profits. Charts play an important role in this market. Three types of charts could be seen and frequently used in this market:

• Candle Stick chart – The chart displays high-low and opening-closing prices.
  
  
• Bar chart – A bar chart also shows high-low and opening-closing prices but in different ways. The top of the bar represents the highest paid price while the bottom shows the lowest traded price for a definite period. The horizontal lines on the chart depict opening and closing prices, i.e., a currency pairs trading range.
  
  
• Line chart – This is the first chart for forex trading for beginners. A line is drawn from one closing point to another. It reflects the price movement within a given period.

You need to register with a reputed broker to begin trading. The broker will let you understand the basics more elaborately and help you to make the right decisions for earning profits from regular trading.