Welcome newbies to the world of Forex Day Trading!
Day trading on the foreign exchange can be a very lucrative activity. It has similarities to trading on the stock market, although it is important to note these are not the same thing.
Foreign Exchange in a nutshell involves the buying and selling of currencies so as to profit from the day-today fluctuating values.
Firstly, what is Forex?
The foreign exchange market (FOREX) is a decentralized global market for the trading of currencies. Participants range from individuals to international banks and large multi-billion dollar corporations.
Participants trade one currency into another for profit.
What is Day Trading on Forex?
Like the name says- it is a deal which takes place in the space of a day. Trading deals are opened and closed within a day, although some day trading deals may last longer than a day.
You can make as many day trading deals as you want.
Getting started with Forex
Paper Trading on Forex for Newbies:
Paper trading is basically a practice form of trading. It is a simulated trading environment in which newbie investors get to practice their trading and decision making skills on a virtual simulated forex environment. There is no real money involved. Consider it Monopoly for Forex.
This is an incredibly useful tool, which is even used by the top businessmen around the world to test their new trading strategies, before implementing them.
The trick is to take it very seriously and use all the strategies to the best of your knowledge to have an idea of how ready you are, before you start with real money.
However, there is no guarantee that because you were great at paper trading, you will make money on Forex. This tool allows you to learn the basic ropes, such as the terminology and the indicators.
An overview of Day Trading Using Easy-forex
Newbies might want to start with easy forex: Here is a simple breakdown of the procedure
There are 3 main steps:
- Choose your deal and add it to your online account: including the currencies you want to trade eg) USD/EUR (Greenback/EURO)
- Monitor the deal through your Forex account which can be accessed and managed 24/7
- Close the Deal. This can be done either manually or by choosing a stop-loss deal. This is a pre-set limit on your pre-set amount, which will automatically stop or sell when it reaches a certain point.
The Basic Forex Day Trading Terms for Newbies:
This is a smallest Price exchange for currency, usually to 4 decimal places.
Minimum Unit of Trade
The number of pips where a seller decides to close their sales to minimize losses
sed to minimize the risk of loss by automatically stopping trade at a pre-set leve
Allows you to open trade exceeding the balance in your account (T’s and Cs)
Quote and price structure for currency traded on FOREX
Bid: Price a buyer is willing to pay for a currency Pair
Trading and Losing some of your trading capital.
Some tips for Beginners:
Don’t rush into it, as soon as you are signed up. Start gradually with smaller amounts of money until you know what you are doing.
Be prepared to make some losses here and there consider hiring a broker in the beginning to get you started. They usually work on commission and can save you a fortune.
There is no single guaranteed strategy- you have to be flexible and keep learning.
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