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The trading process seems to be interesting to traders when they know the market, how it works, the main trading concepts and what is considered normal.
The perspective of trading online matches perfectly with what most people are searching for, a secondary income, financial support, financial independence. Stay on the track with free information available about markets, technology, security standards, payment methods, support team.
Leverage Concept – Leverage is a tool to control market positions, by making the positions larger than they would be without boosting them with leverage.
It is like a crediting method from the broker, to help traders be bolder in the markets without having to deposit a large amount of capital. The number of traders has increased exponentially in the last years, so the daily trading volume does the same. Leverage is a very important aspect of online trading, because it allows anyone to enter the market with a very small amount of capital. By using the leverage, a trade that requires an investment of $10,000 can be opened with only $100.
Forex Trading Rules
Follow the rules to understand financial markets and to improve your trading skills and build your confidence.
Firstly, start slow – do not expect huge profits from the very first day. It is common among traders to lose money when they first start trading, as it is common to see the same traders leave the market. Some of them will keep going by doubling their capital during the first weeks, just to lose everything in the coming days because of their overconfidence in the process.
The key is to start slow, and create profits slowly but steadily. Succeeding in trading takes time, effort, lots of patience and determination.
Secondly, have a trading plan – A plan is a golden rule in trading online. A trader with a very detailed plan has much more chances to succeed compared to someone who does not have a plan. Your plan should consist of the following basic rules: a well – established trading strategy, predefined exit and entry points, predefined stop losses and take profits functions.
Thirdly, set stop-loss function – It is always a smart move to set the stop-loss function in all your trades. A stop-loss function will limit your losses and protect your capital. You are given the power to decide how much of your capital you are willing to lose.
Fourthly, keep your emotions in check – Controlling your emotions is crucial in financial markets. Emotions can ruin everything. There is no room for mistakes or bad decisions, once you lose money, you cannot have them back.
Learning to read economic calendar – First it is placed the name of the event with a flag to its side which shows the country this event belongs to. Click on the individual events to have further details over the event. After that comes the date and the time, when the event will take place. Usually the number shows how much time is left until the event happens. The next column, the impact column, shows how much influence it has on the economy. Low impact means that the event will not have such effect, and high impact means that the event will cause fluctuations and volatility in the market, and you need to see it closely.
Understanding charts – Reading charts is a skill you need to learn and master. A chart is a graphical panorama of the exchange rate between currencies. There are different charts which are available for you to learn the currencies behaviour. The most used ones are: Line, Bar, Candlestick.
Line Chart – This type is the easiest form of charts to understand and be read. The line is drawn from one closing price to the next one on the timeline. You can identify the historic and present price movements of the asset.
Bar Chart – This type shows the high, low, opening and closing currency prices. The top of the bar shows the highest paid price, the bottom of the bar shows the lowest price for that period of time. This type is mostly used to identify the range of price expansion.
Candlestick Chart – This type shows extensive information. It shows the high, low, opening and closing prices. Having this information traders can analyse how the price has moved. The candle is green if the opening price of the candle is lower than the closing price. Otherwise the color is red. The lines above and below the candles are called ‘wicks’ or ‘shadow’ and represent the highest and lowest prices during that period of time.
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