Forex For Beginners - How To Trade & Make Profit

Forex For Beginners

Foreign exchange market is the biggest market in the world, trillions of dollars trade a day around the clock so it appeals to both traders who are trading small size and larger size because it's relatively easy to get your fill and the cost of doing business is much lower when compared to other markets

What we are going to learn in this article is forex trading. I started thinking about those people who are new to forex trading and want to learn more about it, I'm going to teach you what I learn for the past 3 years and I would make it very simple and easy to learn. I would make this article in three-part

Part 1?
  1. What is Forex?
  2. Learn Basic Terms used by forex traders
  3. What we trade and how we trade it?
  4. The software's used to trade.
  5. Choosing broker, Registering and investing.
  6. Demo trading vs. Live trading
  7. Finally, we will place our first trade in the market
Part 2
  1. MT4 trading platform
  2. Chart reading techniques
  3. When shall we enter a trade
  4. When we should close it?
  5. How to withdraw funds
Part 3
  1. What is automated Trading?
  2. Expert advisors
  3. How to make Advisors
  4. Learning an MQ14 programming language
You can skip part 3, by the end of part 2 you will learn everything about forex and you are going to start trading after reading this article until the second part. But the third part is for those people who don't want to sit in front of computer 24 or even whatever the time you decide, and they want some software for themselves to trade automatically for them

In the third part, we'll learn how we should make software that would trade for us

By the end of this article about forex, you will start trading and start making some profit for yourself.

Read: How To Start Forex Trading

Over the course of the next few minutes, we're going to go through some of the basics of the foreign exchange market, how it works, how people trade it and what makes currency pairs move.

In this part I'm going to tell the basic of forex, the question is


What Is Forex?

Forex is basically exchanging two things in our case exchanging currencies. You can see the example below


Forex For Beginners

You can see the exchange rate of USD the united state dollars with the Euros. Here you can see the exchange rate of 1 USD equals 0.8868 EUR

With this exchange rate, your 
  • 1 Euro  = 1.34092 USD
Keep this exchange rate in mind. In the past, in the old age, people used to exchange things, they didn't have the currencies so they used to exchange things, for example, if someone wants shoes you have to sell your rice in order to get some shoes for yourself

I know it's a pretty bad example but you got some idea what I'm trying to say, you have to sell your rice to buy some shoes

The person who is selling his shoes he is actually selling is shoes to buy your rice so it's exchanging thing. That is what we do in forex, we actually exchange currencies

You have to consider this exchange rate which I have shown you

1 USD = 0.882524 if you have this exchange rate and you have
  • 100,000 USD >> 88,674.00 EURO
you want to purchase some euro from that with this exchange rate
  • 1 USD = 0.8868 EUR
You will get about
100,000 USD = 88,674.00 EURO. From a hundred thousand USD dollars
Let say you have $100,000 and you purchase some euros, you'll get 88,674.00 euros in your hands, at $1 = 0.8868 euro exchange rate. 

Then after two or three days, even this exchange market is very volatile it changes very rapidly so maybe after one-day exchange rate as change now, so you got


Forex For Beginners

With this exchange rate

Guess what, you went back to the exchange company and you said oh I have got euros but now I want my US dollars back and you gave back the exchange company the euros you have got yesterday, guess what happened
  • 88,674.00 EURO = 100,777 USD
$777 PROFIT -  by doing nothing
What if reversed happened? Obviously, you lose

You just purchase currency in one day and after the second day the exchange rate changed and you went back to the exchange company and you sold them your euros and now what you got is $777 Profit

This's awesome right, yeah it is.

Now the question is, what if worst happened? Obviously, you will lose
This forex market is all about exchanging currencies, you have to purchase one currency and you have to wait for some time until exchange rate goes in your favor and then you go back to the market and you sell back the currency and you exchange back to the currency which you were having previously
By exchanging money like that gives you some profit, but if you don't that much money maybe you only have 50 to 100 US dollars, I will give show you step by step on how to trade with $100 on my next article


You must have this example in your mind because the foreign exchange is all about this example which I have given you here when you have this example in your mind, you will understand each and everything about the exchange market.


We still have some article coming your way that shows you about the leverage and what are the basic terms people use. Do check back as we will be updating more content about forex trading for now until we cover all the question that people ask about forex

Hope you learn a lot of forexes, I know you do.

Author:

Hi, i am Micheal, the guy behind Roadtosuccesse. I share tips and tricks to help take a business to the next level, show which systems I personally endorse and use, share what I learn as a student of the game, and help people with personal development so that they can reach their full potential.

Facebook Comment