Forex mean Foreign Exchange. It’s the largest market in the world. No other market is as big as this.
Requirement for Forex Trading :
You must have a PC with high speed internet connection. You need high speed internet because market moves every seconds. Only a delay of one second may be a cause of $100 loss.
You will need some money to start forex trading. It will be great if you can invest $1000. If you can’t, you can start with as little as $5-$6. If you start with $1000 you can trade $200000 because of leverage. (if the leverage is 1:200)
Lets learn about some new words of forex like leverage, broker, pip……
Broker : Broker means company with whom you will open an account and you will start you business. They will place you order in forex market. There are many brokers on internet.
Leverage: leverage means getting opportunity to trade more than you invest. Suppose you invested $1000. If you broker offer you leverage 1:200 you can trade of $200,000.
Pip: Pip is the most little unit of currency. ( 100 pip = 1 cent. )
There are many currencies to trade. But first you have to analysis.
We can divide analysis system into two kinds. A) Fundamental Analysis B) Technical Analysis.
1) Fundamental Analysis : It depends on economical condition of a country. And also with political condition. Like, if one country can develop their economy, their currency price will increase.
2) Technical Analysis : Technical analysis means you will observe the price chart and you will try to take decision about its future. You have to understand the trend. Trend means movement of price. Trend is the most important thing of forex trading. If you can understand it, you can earn quite well.
Look at this chart :
You can see price is going up. You can buy now. If you buy at "A" and sell it at "B". You get your profit.
Look at this :
This is down trend. If you buy at "C" and sell it at "D". You will loose your money.
You have to understand. Never buy at down trend. Always buy at up trend. If you buy at down trend you will loose your money. When the chart will go up, buy then. But don't buy at top. Here is an example--
This is up trend. Don't buy at "D". Wait and when it will down a little bit like "B". Then buy it. And sell when price will go up. Like "S". Don't try to get high profit. Sell it when its up little bit. Who knows! Price may down again.
Lets start with a demo account :
Open an account. Go to http://www.liteforex.org/ and open an free practice account. Then download forex terminal from download tab.
