Forex trading is the art the trading currencies from different countries and continents against each other. This involves the buying and selling of different currencies. For instance if you decided to visit the United States, coming from Australia you would need to sell your currency (AUD) to buy the United States currency (USD). While trading may sound fun due to the currency exchange, it also has its basics.
It is very easy to get robbed off your money while trading, this is why you are advised to strategize, analyse and keep track of the different currencies in the market. The forex trading is mainly used by investors and speculators. This is why you should know what currencies to trade, when to trade and how to trade. Some currencies are steady while others are slow. Know how long you want to hold on to the trade and evaluate your trade carefully. Otherwise, if you decide to take a risky trade, make sure it’s calculated. Once you have made a trade and it is closed, your broker closes the trade with the inter bank market and credits your account to a gain or loss which literally happens within seconds.
In the trading world it is recommended to keep track of the forex market and if possible keep a forex diary. Keeping track of the market will enable you be in the know of different currency changes. Forex trading is a risk that gives no guarantees. You do not want to make a mistake that could cost you your investment; this is why it’s necessary to keep a diary. In the diary indicate:
Date and time of position taking.
Strategy for the position.
Rates at which you took the position.
Profits or losses made.
Reasons of taking up the position.
Date and time of position exiting.
Reasons of exiting.
Know your margin and when to use your leverage. Margin is the amount that is set aside to hold your position. It is not charged but instead it’s your account equity set aside and allocated as a margin requirement. Still, leverage is not advised to use by all investors. This is why you should get to understand the terms and conditions of every trade. Have a conversation with your broker about your risks, terms of the trade and exiting options. While at it, be sure you have an honest and genuine broker. Make sure you have the right knowledge by taking Forex trading course. Happy trading.