If they sell a pair, it means that they think the base currency will depreciate, or that its value will fall compared to the quote currency. Keep in mind that there are different types of currency pairs offered by online forex brokers , so make sure you choose the one that matches your needs and requirements. When traders go long it means that they buy a pair whereas if they sell a pair, it means that they go short.

The currency quotes mentioned above, are always quoted with two prices, the bid and ask price. Generally, the former is lower than the latter. When we refer to the bid price, this is the price at which the CFD forex broker wants to buy the base currency in exchange for the other currency.

In other words, the bid price is the best price available that traders can sell to the market. When selling, the broker buys from you at the bid price. The asking price, on the other hand, refers to the price at which the best forex broker will sell the first currency in exchange for the second currency.

Again, this means that this price is the best one available at which traders can purchase from the market. If traders want to buy a pair, the broker will sell it at the asking price. The offer price is another name for ask price. The spread refers to the bid and asks price difference. If traders want to sell euros, they will do so at 1.

If they want to buy euros, they will do so at 1. The difference, that is the spreads, is calculated in pips. Last but not least, a pip is the unit of measurement to show how the value between currencies changes. This is usually the last decimal place of a price quote. IronFX is a leading broker in trading forex online. In fact, the CFDs broker offers more than financial instruments on various assets including forex, metals, shares, futures, indices and commodities. There is a wide range of account types and platforms suitable for all levels of experience.

There are also multiple educational materials and tools offered to help traders sharpen their skills and test their strategies. This information is not considered investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced or hyperlinked, in this communication. Home Forex blog How to trade forex?

IronFX is a trade name of Notesco Limited. Notesco Limited is registered in Bermuda with registration number and registered address of Clovelly, 36 Victoria Street, Hamilton HM 12, Bermuda.

The group also includes CIFOI Limited with registered office at 28 Irish Town, GX11 1AA, Gibraltar. CIFOI Limited is wholly owned by Notesco Limited. Note : Services displayed in this website are provided by Notesco Limited and not by any affiliate entity. Risk Warning : Our products are traded on margin and carry a high level of risk and it is possible to lose all your capital.

These products may not be suitable for everyone and you should ensure that you understand the risks involved. IronFX does not offer its services to residents of certain jurisdictions such as USA, Cuba, Sudan, Syria and North Korea. Risk Warning: Our products are traded on margin and carry a high level of risk and it is possible to lose all your capital.

Meet Shane. Shane first starting working with The Tokenist in September of — and has happily stuck around ever since. Originally from Maine, All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team.

Neither our writers nor our editors receive direct compensation of any kind to publish information on tokenist. Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website.

Click here for a full list of our partners and an in-depth explanation on how we get paid. The Forex market, specifically, is enticing for many reasons: traders can enter into it simply and easily, it is one of the most technologically advanced markets, and you can trade on your own time.

It stands for foreign exchange, and has many abbreviations including, FX. Foreign exchange is simply the process of exchanging currencies from one to another. The foreign exchange market therefore, is where currencies are traded. Currencies are used and recognised by almost everyone who partakes in society because we need it for so many things. Today, the Forex market is the most popular market, making it the biggest and most active, with over 5.

This also makes the market very volatile and unpredictable, enabling traders to profit off both positive and negative fluctuations. As a result, those who trade Forex are never restricted to any particular hours of the day. It also means that currencies are always moving somewhere around the world, because someone is always actively doing business.

For example, during daylight hours in the U. S, the U. S dollar will fluctuate the most. While in Europe, the euro will fluctuate the most during their daylight hours, or between to GMT. One of the best advantages of Forex trading is its accessibility.

The Forex market is one of the most technologically developed markets, and is accessible to people around the globe, once they have an internet connection. While other markets use out-dated trading platforms, the Forex market is constantly upgrading the software used. For instance, traders can stay up-to-date on fluctuations on the British pound in the midst of BREXIT in real-time, which is important for individuals and companies alike due to its potentially turbulent exit from the European Union.

S dollar. However, true to the unpredictability of the market, the announcement barely affected it. See our top US Forex brokers. The Forex market is well and truly the market that never sleeps. So, where did it all begin? The first known sign of currency exchange has been traced as far back as BC in Egypt. Fast forward to when the Bretton Woods Accord was signed which allowed currencies to fluctuate within a tight range.

Not long after, in , a free-floating currency system was introduced and thereby, creating the market as we know it today. This same year, computer monitors were introduced, replacing old-era telephone and telex methods. Traders could now trade on real-time. Most people around the world will need to trade currencies at some stage in their lives. If you are in England and you want to buy a phone online from the U. S, then someones currency needs to be exchanged for the purchase to take place.

For example, the person in Britain would need to change their pounds GBP into U. S dollars USD. Travel and holidays also require the exchange of currencies. Exchange rates define how much your currency is worth in another currency. The price of most currencies is decided by Foregin Exchange Traders who trade the currencies twenty-four hours, five and a half days a week.

A strong currency is good because it allows you to buy more of other currencies, which is great for many reasons, but especially for commerce. The price of currencies is constantly changing and there are a lot of complex factors that influence this.

Currencies are not directly regulated by Governments or banks, and usually the most a Government will try to do is influence the rate. Higher interest rates increase the value of a currency because more investors swap their currency for the better paying one and then invest it in that country to yield the higher interest rate. In the U. For example, if the Federal Reserve lowers the fed funds rate, interest rates will go down across the U. This in turn makes loans cheaper to encourage investing and spending in the economy.

When interest rates are significantly lowered, investors are less likely to exchange their currency to the U. The central bank can also affect exchange rates by printing too much money to induce price inflation. When a country spends, they get the money from taxing, borrowing, or printing more money. Countries that choose to print more money usually have inadequate tax revenue, high spending, and may have run out of any borrowing options.

In certain cases, when far too much money is printed, hyperinflation will occur. This is rare but it can happen when countries have extreme debts to pay, such as war debts. Investors are more likely to buy goods and services from a strong, growing economy. Until now, it might have seemed straightforward enough that a stronger currency equates to good news for a country.

But formulas are a rarity in this industry, and things are never that simple. In the past couple of decades, the Chinese Government have been accused of consistently devaluing the Chinese currency Renminbi in order to advance its own economy, especially by Donald Trump.

China has a strong export sector which allows them to run a current account surplus. A weak currency keeps Chinese exports very competitive in a global market, and at the same time, it makes imports more expensive. Chinese exports have been a key factor in the economic growth of the country, creating better-paid jobs for traditionally low-paid agricultural workers. The U.

S has criticized this strategy as currency manipulation. Using breaks as trading signals, the breakout is considered a long-term strategy. The breakout itself occurs when the market goes further than these consolidation limits — whether that be lower or higher.

As such, a breakout must take place whenever a new trend occurs. By looking at breaks, you will have a good indication of whether or not a new trend has begun. In this case, you might want to use a stop-loss order to give you a better chance of avoiding a substantial loss.

As glamorous as a career in forex trading might sound, there are a number of risks that you need to take into account. In the below sections of our forex trading PDF, we explore these possible risks in more detail.

The transaction risk is in relation to the exchange rate and any time zone differences. This means there is a chance that at some point between the beginning and end of a contract that the exchange rates could be subject to change. The risk of this happening elevates with the more time that passes between entering a contract and settling the same contract.

This generally leads to investors withdrawing investments, and as a result, your return will be lower. The good news is that when a currency rate is on the rise, chances are that the respective currency will be stronger.

When this does happen, your returns could be higher. This is because seasoned investors like to gain exposure to stronger currencies. The higher your leverage is, the higher your losses or benefits will be. Of course, this means leverage can affect your trading in a positive or negative way — depending on which way it goes. The final part of our forex trading PDF is to explore which brokers are popular with both newbie and seasoned traders.

Each of the forex trading platforms listed below has been pre-vetted, meaning that you can be confident they tick most boxed. This means that each platform is regulated, offers heaps of forex pairs, has low commissions and fees, and supports several payment methods.

AvaTrade is an established broker that offers thousands of financial instruments. On top of stocks, indices, commodities, and cryptocurrencies all via CFDs , you can also trade heaps of forex pairs.

There are no trading commissions to pay, and spreads are very competitive. You can either trade via the AvaTrade web-platform, or via popular third-party provider MT4. The platform is heavily regulated, with several licenses under its belt. com is an FCA, CySEC, ASIC, and NBRB-regulated online broker that offers heaps of financial instruments.

All in the form of CFDs - this covers stocks, indices and commodities. You will not pay a single penny in commission, and spreads are super-tight.

Leverage facilities are also on offer - fully in-line with ESMA limits. Once again, this stands at on majors and on minors and exotics. If you are based outside of Europe or you are deemed to be a professional client, you will get even higher limits. Getting money into Capital. Having made it this far through our forex trading PDF, you should by now have an understanding of how technical analysis works, and have a good grasp of the macroeconomic fundamentals which guide currency values.

Armed with all of the useful information included in this guide, you should be ready to get out there and start trading forex. Hopefully, making a profit and learning more along the way. If you are a trader with somewhat limited funds, you might find that swing trading suits you best. If you have a larger trading fund available to you, you might have a more profitable experience with fundamental based trading. Either way, w e do recommend trying out a free demo account where possible before trading with your hard-earned money.

As well as reading helpful guides like ours, actually learning by doing will also provide you with a better sense of how it all works and how you might like to trade yourself. What does forex mean? Forex as a term refers to 'foreign exchange'. You will make money in two different scenarios. You either buy a currency pair for less than you sell it for long order , and you sell a currency pair for less than you bought it for short order.

The spread is the difference between the bid and ask price of a forex pair. This gap in pricing must be included in your profit and loss forecasts, and it is how the broker ensures that the platform always makes money.

This depends on the type of forex pair you are trading. The pip refers to the movement of one decimal place in a pair. This depends on several factors, such as your location, the currency pair, and the broker itself. In most cases, traders from the UK and Europe are capped to leverage of on major pairs and on minor and exotic pairs. Slippage means that your forex order is executed at a slightly different price to what you had asked for.

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Zero commissions on all assets Super-tight spreads FCA, CySEC, ASIC, and NBRB regulated. Does not offer traditional share dealing. Visit Capital. You should consider whether you can afford to take the high risk of losing your money. How do you make money in forex?

Unlocks access to the leading crypto trading analysis, signals and trading tools. World class development team backed by Quant developers and VC investors. Our Forex trading PDF, it is widely believed that forex is one of the biggest and most fluid or liquid asset markets in the world.

Sometimes referred to as FX, currencies are traded 24 hours per day — 7 days per week. In simple terms, refers to the process of exchanging one currency to another — and generally speaking, this will be for tourism, commerce, trading and many other reasons. In this forex trading PDF we are going to talk about what forex trading is and some of the commonly used terminology in the industry.

Essentially, it is the action of selling or buying foreign currencies. Of course, these are all used by banks, corporations and investors for a variety of reasons like profit, making a trade, exchanging foreign currencies and tourism. One of the major benefits with forex trading is that after opening a position, traders are able to put in place an automatic stop loss as well as at profit levels this closes the trade.

The forex market is a place to buy or sell against each other a variety of national currencies, globally. Wherever two foreign currencies are being traded, you can be sure that a forex market exists regardless of the time zone.

In this section of our forex trading PDF, we are going to run through some of the most commonly used forex trading terminologies in the industry.

The pip represents the smallest amount possible a currency quote can alter. For instance, 0. The differentiation between the sale price and the purchase price of a currency pair is known as the spread. The least popular least commonly used currency pairs usually have a low spread. In some cases, this can be even less than a pip.

When trading the most commonly used currency pairs the spread is often at its lowest. The total value of the currency pair needs to surpass the spread in order for the forex trade to become profitable. In order for forex brokers to increase the number of trades available to its customers, they need to provide capital in the way of leverage. Before you can trade using leverage, you must sign up to a forex broker and open a margin account.

Contingent on the broker and the size of the position, leverage is usually capped at if you are a retail client non-professional trader. Some offshore forex brokers will offer much more than this if you are seeking higher limits. It is because of the aforementioned example that you should exercise caution when using leverage. Should the worst possible scenario happen and your account falls below 0, you should contact your forex broker and ask for its policy on negative balance protection.

The good news is that all forex brokers which are regulated by ESMA the European Securities and Markets Authority will be able to provide you with this extra level of protection, ensuring that you never become in debt with your broker. Margins are a good way for traders to build up their exposure. Put simply, in order for a trader to maintain position and place a trade, the trader needs to put forward a specific amount of money first — this is the margin.

Rather than being a transaction cost, the margin can be compared to a security deposit. This will be held by the broker during an open forex trade. It is commonplace for forex brokers to give their customers access to leverage see above. In order for you to lower your risk of exposure and offset your balance, you might consider hedging. This is a procedure which involves traders selling and buying financial instruments.

When there are movements in currencies, a hedging strategy can reduce the risk of disadvantageous price shifts. The protection of this technique is often a short term solution. Traders often turn to hedge in a panic as a result of the financial media reporting volatility in currency markets. This is usually down to huge events like geopolitical turmoil conflict in the middle east , global health crisis COVID and of course the great financial crisis of To counteract negative price movements, market players will tactically take advantage of attainable financial instruments in the market.

This is hedging against risk in its truest form. Hedging will give you some flexibility when it comes to enhancing your forex trading experience, but there are still no guarantees that you will be totally protected from any losses or risks. While it can take some time to get your head around heading in the forex markets, the overarching concept is that it presents both outcomes.

That is to say, irrespective of which way the markets move, you will remain at the break-even point less some trading commissions. More specifically, the spot trade is a spot transaction, with reference to the sale or the purchase of a currency.

Essentially, spot forex is to both sell and buy foreign currencies. A good example of this is if you were to purchase a certain amount of South African rands ZAR , and exchange that for US dollars USD. If the value of the ZAR increases, you are able to exchange your USD back to ZAR, meaning you get more money back in comparison to the amount you originally paid. CFD is basically a contract which portrays the price movement of financial instruments.

So, without having to own the asset, you can still make the most of price movements, whilst also avoiding the need to sell or buy vast amounts of currency. CFDs are also accessible in bonds, commodities , cryptocurrencies, stocks, indices and of course — forex. With a CFD you are able to trade in price movements, cutting out the need to buy them at all. This section of our forex trading PDF is all about forex charts. When it comes to a MetaTrader platform, traders can use bar charts, line charts and candlestick charts.

You can usually toggle between the different charts, depending on your preferences, fairly easily. The first record of the now-famous candlestick chart was used in Japan during the s and proved invaluable for rice traders. These days, this price chart is without a doubt one the most popular amongst traders all over the world. Much like the OHLC bar chart see below , candlestick charts provide low, high, open and close values for a predetermined time frame. Live forex traders love this chart due to its visual appearance and the range of price action patterns utilised.

This allows you to gain a better understanding of how live trading works before you take any big financial risks in the market. As the title suggests, this one is a bar chart, and each time frame a trader is looking at will be displayed as a bar. In other words, if you are viewing a daily chart you will see that every bar equates to a full trading day. With this price chart, traders are able to establish who is controlling the market, whether it be sellers or buyers.

OHLC analysis was the starting block for the creation of the ever-popular candlestick charts please further down. It is a great tool for looking at the bigger picture when it comes to trends. The line chart arranges the close prices at the end of that time frame; so in this case, at the end of the day, the line will connect the closing price of that day.

In this section of our forex trading PDF, we are going to talk about the different ways in which you can sell and buy a forex position as well as things to look out for. When it comes to forex trading you can trade both short and long, but always make sure you have a good understanding of forex trading before embarking on trades. After all, forex trading can be a bit complex to begin with, especially when mixing long and short trades. In a nutshell, going long is usually a term used for buying.

So, when traders expect the price of an asset to rise, they will go long. When forex traders expect the price of an asset to fall, they will go short.

This means benefiting from buying at a lesser value. To achieve this, you simply need to place a sell order. The current exchange rate of a forex pair is always based on market forces. This will change on a second-by-second basis. As we noted earlier, you also need to take the spread into account, so there will always be a slight variation in pricing.

For instance, if you exchange 1 USD for 17 ZAR, the sale and purchase price offered by your forex broker will be either side of that figure. The currency pairs with the most notable supply and demand attached to them will be considered the most liquid in the forex market. The supply and demand aspect is thanks to the investment of importers, exporters, banks and traders — to name a few.

The most liquid currency pairs are therefore the ones in high demand. When you feel you are ready to take the plunge and begin live trading, you need to select a forex trading system. There is a vast amount of trading strategies for you to pick from. This is because investors, speculators, corporations and banks have been trading for decades. In this part of the forex trading PDF, we are going to explain a few of the strategies available to you. If you want to buy and sell currency pairs from the comfort of your home or even via your mobile device , you will need to use a trading platform.

Otherwise referred to as a forex broker, there are literally hundreds of trading platforms active in the online space. This makes it extremely difficult to know which broker to sign up with. In the below sections of our forex trading PDF, we explain some of the considerations that you need to make.

You should also look out for analysis tools available to you. In some cases, this might be embedded, while some offer tools such as technical analysis and fundamental analysis. This is because it will save you a lot of leg work having to move between different sites and sources of information.

Some of the fastest and easiest trading platforms are MetaTrader 5 MT5 and MetaTrader 4 MT4. Crucially, both MT4 and MT5 are fast and receptive trading platforms, both providing live market data and access to sophisticated charts. It is essential before you begin trading seriously that you fully trust the trading platform you intend on using.

This is especially the case if you intend on using a scalping strategy, for example. However, if you like to trade, it is vital for your peace of mind and your finances that you are fully confident with the fast execution of data transfer. This is also the case with the precision of quoted prices, and the speed of order processing. All of these things are going to help you to have a successful forex trading experience. To enable you to make the most of new opportunities, the ideal forex broker will be available to you 24 hours a day and 7 days a week, in line with the forex market opening hours.

To save you from having to request that your broker takes action for you, your forex broker should enable you to manage your account and your trades separately.

Brokers regulated in the U. Every day millions of large and small traders globally open deals on the market, and South African traders are among them. There are plenty of online forex brokers to choose from. Shane first starting working with The Tokenist in September of — and has happily stuck around ever since. Forex Trading for Beginners in When you analyze the market, you will make informed trading decisions. These include white papers, government data, original reporting, and interviews with industry experts.

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