The vast majority of retail investor accounts lose money when trading CFDs . You should consider whether you can afford to take the high risk of losing your money.
Forex (foreign exchange) market is a place where currencies from around the world are traded for profit. This market started in the 1970’s and unlike other markets, Forex market is unique, because it’s extremely easy for anyone to start investing. The Forex market isn’t controlled by external factors and investors determine the value of a certain currency in any given time.
If you want to start investing in Forex market, here are some steps to follow:
Learn The Terms- any investor should have a firm grasp on common terms in the Forex market. The currency that you are holding is called “base currency” and the currency you are planning to buy is called “quote currency”. “Bid price” is the price that buyers are willing to pay and “Ask price” is the price that sellers are willing to take. In Forex market, Ask price is higher than the Bid price. The price difference between the Ask price and Bid price is called “Spread”. Another important term is “Pip” or the smallest measurable change in value. One pip is usually equal to 1 percent of the value of the currency.
Choose A Reliable Broker- new Forex investors need brokers to start making trades successfully. By working with reputable brokers, you significantly reduce risks of frauds.
Analyse The Economy- Forex investors need to analyse the global economy and also the economies of certain countries. They need to accurately predict the trend of the global and local economies and make simulated trades to test the accuracy of your predictions. A common method is to choose a quote currency that may rise in value and convert your base currency into it. When the value of the quote currency reaches the peak, you need to convert it back to the base currency to know your potential profit.
Start Trading- after you are sure of your own analysis, choose the best quote currency to buy. Place an order for the first transaction. Based on your analysis and advices from brokers, you can start buying and selling currencies. After placing orders, you can sit back and let the brokerage firm handle the rest.
Contact CFI Financial
To learn more about investing in today’s global markets, contact CFI Financial today and speak with someone who can answer any questions that you might have.
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