When do you trade in Forex?

When do you trade in Forex?

The Forex market is unique, it is open 24 hours a day. From Tokyo to New York, passing through London, the market moves and can operate at any time, day and night.

Opening and closing of the three most important centers (time expressed in GMT):

Tokyo: It opens at 0 o'clock and closes at 9 o'clock.
London: Open at 8 and close at 17.
New York: It opens at 13 and closes at 22.

Main attractions of Forex trading

• No commissions.
• Usually the trader is not charged with commissions of almost any kind. The brokers through which it operates charge the spread, typically representing less than 0.1 percent of cost per transaction, in larger brokers it may even be less than 0.07 percent, of course it depends on leverage, we will see this in more detail later
• Without intermediaries. The Forex market as we refer to in eFXto is the Forex spot market, which means trading directly with the market.
• Flexible lots. The minimum contract per transaction is very flexible in Forex compared to other markets. And you also choose the size of your operation. This allows you to participate with accounts as small as $ 50, you can even trade with cents !! (Although it is not good to operate with such small accounts, you will discover it throughout the course).
• 24 hours. From Sunday evening to Friday afternoon you can operate at any time of day, even in principle, there is no deadline for closing your operation.
• Leverage. A small sum of capital can control a much larger volume of Forex trading, this is due to the high leverage available in this market. For example with a 100: 1 leverage, you can make an operation of 100 thousand coins with a deposit of only one thousand. But this is a double-edged sword, using high leverage can lead to big gains or high losses.
• High liquidity. Being such a huge market, the liquidity it offers is equally enormous. This means that under normal market conditions, you can buy or sell instantly.
• Mini and micro trading. You can start trading Forex with mini or micro accounts that require small minimum deposits, $ 500 or less. This makes it accessible to virtually everyone, however, to be able to operate with an appropriate risk control can be recommended a greater initial deposit, you will understand.

Forex Opportunities: what is your opinion?

As with stocks, you can trade currencies based on your opinions on the values ​​of the currencies (or the prices that you think currencies will have in the future). However, what distinguishes Forex is that you can trade in both bullish and bearish trends. If you think a currency will go up in price, you can buy it. If you think its price will fall, you can sell it. Also, since Forex is so great, finding buyers and sellers is much easier than in other markets subject to liquidity.

To see an example, you may have heard in the news that China is devaluing its currency to attract foreign investment. If you think that trend will continue, you can do a Forex trading: sell Chinese Yuan in exchange for another currency, say, the US dollar. The more the yuan depreciates against the dollar, the higher your earnings will be. On the other hand, if the yuan appreciates after having sold it in exchange for dollars, you will suffer losses and want to exit the market.

Trading Forex. How to buy and sell currencies.

You have your opinion. And now that? Open your free Forex demo platform and operate according to your opinion.

All Forex transactions involve two currencies, since you are betting the value of one currency compared to another. Think of the EUR / USD, the most traded currency pair in the world. The EUR, the pair's first currency, is the basis, while the USD is the quoted currency. When you see a quote on your platform, the price shows how much is worth 1 euro in US dollar terms. Quotes always show two prices: a purchase and a sale, and the difference between them is known as spread. When you click buy or sell, you are buying or selling the pair's first currency.

Let's say you think the value of the euro will rise compared to that of the US dollar. This pair is the EUR / USD. Since the euro is the first currency, you would buy the EUR / USD pair. On the other hand, if you believe that the value of the euro will fall compared to the dollar, you would sell the EUR / USD pair.

If the purchase price of EUR / USD is 0.70644 and the sale price is 0.70640, it means that the spread is 0.4 pips. When the price moves, either in your favor or against you, you have to take into account the spread to calculate your gains or losses.

Fractions of a penny: trading with leverage

If price quotes come up to the hundredths, how can you make significant gains by investing in Forex? The answer is leverage.

When you trade Forex, you are basically borrowing the pair's first currency to buy or sell the second currency. Because Forex is a market with a daily volume of $ 8 trillion dollars, there is so much liquidity that liquidity providers (big banks) allow you to trade with leverage. To use leverage, you simply have to set aside the margin required for the size of the trade. For example, if you leverage 50: 1, you can trade $ 1000 by setting aside a margin of just $ 20 in your trading account. This gives you a lot more exposure with a low investment.

Even so, leverage not only increases your potential profits, but your potential losses (which may exceed the value of your deposit). If you are starting in Forex, it is advisable that you always operate with small amounts and low leverage, until you gain confidence in the market.

How Does Forex Trading Work?

In the past, currency trading was an activity done by international tourists. When a person traveled to another country, he had to change his currency by the local currency at the current exchange rate of the moment.

However, currently trading forex is a type of investment that has gained great popularity. Now traders can speculate on the exchange rate variations of two different currencies.

Trading is both a lucrative and leisure activity.

Forex Trading for Beginners

Many believe that forex trading is a simple activity that anyone can do. However, the reality is that about 96% of new entrants end up losing their initial capital. Many enter the market with a haughty attitude, saying things like "They lost, but it will not happen to me". In the end, they lose all their capital and fail to know how it happened, or believe they were victims of a scam.

The truth is that currency trading is not a scam, but an industry where those with a good knowledge of the sector triumph. Therefore, the goal of new entrants should not be to earn money, but to properly study and understand the market.

One of the biggest problems facing beginners is leverage. This is a currency market tool that allows you to make transactions for much larger amounts to your deposits.

For example, if an operator makes a $ 1,000 deposit and uses a 2: 1 leverage, it can conduct transactions of up to $ 2,000.

Most brokers offer leverage of up to 50: 1, and many beginners make the mistake of using as much leverage as possible, without measuring the consequences. Although leverage may seem like an attractive tool to multiply profits, it actually involves a high risk.

Returning to the previous example, if the operator with the $ 1,000 account uses a leverage of 50: 1 to make a $ 50,000 transaction, each pip of the price will equal $ 5. If currencies move every day on average between 70 and 100 pips, the loss in a single day for this person could be around $ 350.

If this operator has a losing streak, in only 3 days will end the balance of your account (assuming conditions are normal).

Most beginners are overly optimistic and say things like, "But I can double my capital in a matter of days." Although it is true, few can bear to see the fluctuations of prices. Most new operators believe they can do it without problems, but when it comes to truth, they find that it is not really that simple and they tend to make mistakes.

How to Avoid Mistakes in Forex Trading Assuming you can avoid the temptation to use high leverage, you should also keep your emotions in check. Feelings are one of the worst enemies of currency traders. For example, if you use too high leverage, your emotions can cloud your vision and make you make costly mistakes. To prevent these drawbacks, you must create a trading plan that outlines the basic guidelines for trading, and write a trading journal to keep track of your progress. When surfing the Internet, you may think that you are the only person who simply can not succeed in the forex market. That is not true. It's just your own perception that makes you see things that way. Many have trouble making a profit, but their pride will not let them tell the truth. Those are the people who usually visit Internet forums or Facebook to post how wonderful is the currency trading, when in fact they are experiencing the same problems as you. To succeed in currency trading, you have to study and concentrate. Practice first on a demo account and invest small amounts when you start. Do not feel bad about your mistakes, and use them to learn and move forward. There are many people who fail in Forex because they are not honest with themselves. If you learn to be sincere, you will have half of your success insured.