Over the counter (OTC) foreign exchange market is not like other financial markets. However, there will be no physical location or even central changes. Besides, this trading will be trading 24-hours in a day via global networks of banks, individuals, and businesses. It also means that currency prices will also be fluctuating and therefore offering multiple trading opportunities.
On the other hand, at City Index, you will be speculating for the future to know whether prices will go down or up of their value. In the article, I have highlighted the steps you have to follow and fun trades to learn when starting trading:
- Picking Currency Pair
The first step will be making a decision on the currency pair that you are willing to trade. There are many currency pairs in the market that you can pick, but the essential thing is to have the right pair. However, to choose the right pair, City Index’s fundamental and technical research will help you.
- Make A Choice Of Forex Trade Type
In forex trading, there are three ways that you can trade. It’s either forex trading, CFD or City Index Spread Betting. When you make the right choice you want to venture into, you can, therefore, start trading. For example, in forex trading, you will buy slots but spread betting you need to trade pounds or seek reputable CDF broker services .
- Make A Decision Of Buying Or Selling
After picking a market, then follow and know the price that it is trading that can bring any order in the market. For all forex, they will quote in terms of a currency to another.
For each currency pair, it has a “base” and “quote” currency. The right currency will be base and left will be quoted. If you trade foreign currencies you have to buy them and then sell then.
- Adding Orders
The instructions of automatic trading are the “order.” It reaches a certain level that will be predetermined by you. However, it is simple to utilize the stop and limit the orders so that you can lock to gain profit. Besides, you will also have reduced the risks.
To have stop-loss order, it will be an instruction that you can close your trade with a worse price than in the current market level. It is a way you can minimize losses. It consists of two types of losses, the guaranteed stop losses, and standard stop losses order.
On the other hand, a limit order will close the trade with a better price than what is in the current market and will also be used to look in rice targets.
- Monitoring And Closing Trade
If open, the traders’ profit and loss can fluctuate after every move in market price. So, you will track the market prices and see your unrealized profit or losses. If you are interested in learning everything about best forex trading strategies, make sure you read this guide.
- Closing Trade
Lastly, the last thing is closing your trade. Here, you do the opposite of what you did while opening the trade. In an example, you can buy 3 CDFs for opening and closing you have to sell the 3 CDFs. It is when you will realize whether you have made profit or losses.
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