Also you need to first understand what exactly is forex trading?
Forex trading is nothing more than buying and selling of currencies (like USD, GBP, AUD etc) to make some profit. Let us understand this with an example. Suppose you are an Indian and decided to visit USA. Once you landed on the airport in USA, you will need to buy some US Dollars in exchange for your Indian Rupees (currency of India) because you cannot buy anything from Indian Rupees in USA. Suppose your plan was to stay for only 1 day in USA. You estimated that for spending 1 day in United States you will not need more than 100 dollars. So you decided to buy 100 dollars. Suppose the current exchange rate for dollar to Rupees is 40. That is 1$= Rs.40 which means you need to spend Rs.40 to buy 1 US dollar. So you need to spend Rs.4000 to buy 100 dollars. Please note that in this transaction you are buying US Dollars and spending Indian Rupees. That is to say when you are buying one currency; you are selling the other currency simultaneously.
Now suppose after staying for complete 1 day you realized that due to some reasons you were unable to spend your $100 in USA. So now you are getting back to India with $100 in pocket. Again at the USA airport you need to buy Indian Rupees in exchange for 100$(which is in your pocket) as in India you cannot make use of dollars. Let’s suppose exchange rate (for Dollar to Indian Rupees) got changed (exchange rate fluctuates all the time) in one day and 1 US Dollar became Rs.50. So now you will get 5000 Indian Rupees for $100 (while you spent only 4000 Indian Rupees to buy $100 earlier). This gives you a profit of 1000 Indian Rupees unknowingly. This is usually the concept of forex trading or currency trading. Forex means foreign exchange. You actually don’t buy and sell anything here but just exchange currencies and earn profit or loss due to fluctuations in exchange rate.
Some people think forex trading is scam or gambling but its not so. Infect its 100% legal just like stock or share trading. While you are trading online you simply buy currencies in pair at a point of time and sell them at another point of time when you realize you are making profit (due to fluctuations in exchange rate). Currencies are always bought in pairs which mean if you are buying one currency you are selling the other currency simultaneously as mentioned earlier. This is because if one currency rises in value than other currency in the pair gets lowered in value. But you can even face loss when prediction for the exchange rate fluctuation is not as expected.
But since buying and selling happens in real time you can cover your loss within minutes. Basically you loose money when you become greedy. 80% of forex traders still make profit as they can understand the trend of fluctuations from graphs which tell the history of exchange rates.
But it’s actually very easy to make money from forex trading. I am telling this because you can practice forex trading with DEMO ACCOUNT. Every broker site like etoro provides demo account. In demo account you can actually purchase and sell currencies in real time and check for profits without transaction actually taking place. If you can make profit in demo account then 100% you have learned forex trading and then it becomes easier for you to make profit in your actual trading account. First I recommend signing up and opening a free demo account in some online forex trading sites like etoro.com. Etoro is 100% legal currency broker. In demo account check for various tools for currency trading and get back to this tutorial to learn more about getting started with it. As it will be easier for you to learn once you check the tools to trade in forex in free demo. In your real account you need to deposit minimum $100 only to get started with currency trading.
Now let’s see how to work with DEMO or PRACTICE account. Your actual account is exactly same as a demo or practice account. But in demo account profit or loss shown (while you trade) are not counted as opposed to real or actual account. You will see initial deposit of $10,000 or $5000 (this will be your actual deposit in real account) as your account balance in demo account. Now as you trade, this account balance will go up or down as you make profit or loss while trading online in demo account. As you login in demo account you will see currency pairs like Euro/USD, GBP/USD etc and aside every pair you will see “Buy” and “Sell”. Like if you want to trade in GBP/USD currency pair then button will say “Buy GBP” and “Sell GBP”. First currency in the pair is the base currency. These buttons are used to buy GBP and sell USD or sell GBP and buy USD. Both buying and selling for a currency pair happens simultaneously. It actually means say if you are buying 1500 GBP then you are also selling 1500 USD at the same time. The system will also show a price to buy GBP and a separate price if you want to sell GBP. If you check these prices you will find them fluctuating every now and then. For a particular price you can immediately buy or sell as you wish. These are actually the market prices for you to buy or sell. If you find this as confusing just forget it and instead do as what I say in next paragraph. You will automatically learn as you start trading.
At a particular point of time suppose the rate is $1.6190 to buy 1 GBP (British pound). Say you buy 1500 GBP at that point and so how much it will cost you? You can simply do the calculation as 1500GBP * 1.6190 = 2428.50 USD. So it cost you $2428.50 to buy 1500 GBP but you will notice that this amount didn’t actually get reduced from you account balance ($5000). So you don’t actually pay when you trade in forex. Also you will notice that as soon as you buy 1500GBP the system will start showing your P/L which is profit or loss and also the system will start showing equity. Both P/L and equity will have random values according to fluctuations in exchange rates. Initially when you bought 1500GBP, in P/L, the system will show negative value which means you are in loss. You are in loss because the time you bought 1500GB, selling price of GBP in the system was lower than the buying price.
But you don’t need to panic. You bought 1500 GBP @1.6190 right? Now wait and watch till the selling price goes positive and becomes more than buying price. Once the selling price reached above your purchased price (1.9190) the system will automatically start showing P/L as positive and at that point if you close the deal you will earn profit and your profit will be reflected in your account balance. Once you make a deal like you purchased 1500GBP, this deal will be shown in “open deals” section of the website. Once you see profit in P/L you can simply close this deal and get out of the trade. As soon as you close the deal the profit will be automatically added in your account balance. But you if you didn’t reach profit level and closed the deal already then all the loss will be reduced from your account balance. You have complete freedom when to close the deal.
So if you are really interested to make money from forex trading I recommend starting at etoro.com as you can start with only $100 and they provide free practice account.
Buy The Hunger Games Movie Mockingjay Prop Rep Pin
