The foreign exchange market does not have any central exchange or physical location, unlike other financial markets. The market trades whole 24 hours in a day and is connected through a wide network of banks, business, and individuals from around the globe. It means the prices of the currency will keep fluctuating in value all the time against each other and offers multiple trading opportunities. Listed below are the steps for trading in forex. Trade with legit robot.
Steps to follow
Step-1- Choose the currency pair- The first thing you need to do is to choose a currency pair that you would like to trade. There are more than 65 currency pairs one can choose from. It is very much essential that you pick the right trading opportunity. You can use different fundamental and technical research tools which will guide you to choose the trading opportunities that suit your style. Also, it is critical that you understand about the price volatility that is associated with the pair you have chosen to trade so that it is easier to manage the risk.
Step-2- Settle on the forex trade type- There are mainly 3 types of forex trading:
- CFD trading- Here, you trade the CFD quantity in the base currency unit.
- Spread betting- In this case, the traders trade the pounds on each point movement.
- Forex trading- In this case, in the base currency’s unit, you buy the lots.
Step-3- Decide to sell or buy- Once you have decided on the type of market, you should know the current price of the pair you are going to trade. Every currency pair has quote currency and base currency. If you feel that the base currency is going to strengthen against quote currency or the quote currency is going to weaken against base currency, then you need to buy that pair. With the increase in exchange price, the profits will only rise.
Step-4- Adding orders- The order means an instruction given to trade automatically at a particular point in future when the price reaches a stipulated level. It helps in ensuring that you are able to reap in profit and at the same time lowers the risk. There are different types of orders:
Stop loss order- It is an order given to close the trade when the price has worsened and it helps in minimizing the losses. There are 2 kinds of this order- guaranteed and standard order.
Limit order- It is an order given to close the trade when the price is far better than the current level and it helps in locking the targeted price.
Step-5-Monitor and close the trade- The profit and loss of the trades will keep fluctuating each time the market price moves. You should keep tracking the market prices, check your unrealized profits or loss updates, keep adding new orders, exit from old trades and so on.
Step-6- Close the trade- When you close the trade, the net profit or loss will be immediately get realized and it will reflect in your account.