[simple_series title=”Forex Beginners”]
A skilled trader is the one who has passed series of lesson and training, along with proper knowledge in applying each theory. Experiences and practices are the perfect combination to build success in foreign exchange trading. Definitely, the same thing applies on all kinds of career occupation that everyone involves.
If you happen to read this article, you should be very lucky that you are in the right place! Keep on reading this and get demo account then practice your trading simultaneously you can determine the best method which you really can comprehend thoroughly and accomplish objectively with comfortable feeling.
First Tip in Trading: Margin Trading
This is for beginners who might have limited capitals for trading foreign exchange. Margin trading is basically the phrase which is applied for traders who borrow capital to start trading. Traders only have to prepare only $25 at the very least for opening $1,250 positions. Margin trading allows traders in conducting moderately big transactions with small initial capital amount in fast way.
For experienced traders who use brokers, they can choose some currency units such as
Micro : containing 1,000 units of currency
Mini : containing 10,000 units
Standard : containing 100,000 units
Let’s take a look at this example. A is certain that the foreign trading market shows strong signals that the Euro is rising versus USD. Then, A opens one micro lot (1,000 units EUR/USD) and buys with Euro at 2% margin. A will expect to the increasing the exchange rate. When A buys one micro lot of EUR/USD at a price of 1.30000, A is buying 1,000 units which is equal with US$ 1300.
As the requirement of the margin is 2%, then $26 is set aside on A’s account for trade open up (US$ 1300*2%). A is controlling 1,000 units EUR with only $26. It is such a small amount to start and beginners can take this as their main advantages. They can their currency units gradually when they think they are ready.
When A is about to close a position, A will get the deposit that A was made originally in which it will be an accomplishment of A’s profits or losses calculation. The profit or loss is credited to A’s account.
Foreign exchange trader is now better as there are certain brokers who let traders in having custom lots, thanks to the retail foreign exchange trading development. It means, any trader does not need to trade in either lots! Traders can just choose how many units they want trade.
There will be further discussion about margin trading in later sessions. Though it may look simple, it requires deep knowledge about currencies prediction based on each country’s economic condition. At least, you have understood the basic understanding of margin trading.
So, we have made further steps in foreign exchange trading lessons. You will find it easier in applying each topic simultaneously while keep updating yourself with the upcoming lesson. Next, we will learn about several orders that all traders have to master.