WHAT’S FOREX?
Fibonacci Retracement at Forex [Full Guide 2020]
July 2, 2020Forex allows any person in the world to trade very easily.
Forex is a global and decentralized market that allows any person to trade two currencies against each other. This market determines foreign exchange rates for every currency. In terms of trading volume, it is by far the largest market in the world, with a volume of 5.1 trillion dollars per day.
Quite simply, it’s a global and decentralized market that allows any person to trade two currencies against each other. Whenever you travel to another country, it often has a different currency. That forces you to exchange your country’s currency to the one that country uses.
Imagine you exchange 200$ before your trip and after your whole vacations you didn’t spend any money. You should come back to the foreign exchange office and, guess what? Almost certainly, you wouldn’t receive the 200$ back. But, WHY?! Because the relation between different currencies varies with time. And that’s how Forex works. You can benefit from that by buying currencies that will increase their price or selling the ones that will go down. We’ll study on following chapters about how you can “predict” that. And certainly you can, if you decide you want to.
How to get started in Forex?
The best way to learn is by practicing on a Demo Account. Beginners have the same opportunities that a real account provides: currency price movements are real, market approach is real, but the money you spend is virtual. We strongly recommend that you start with a demo account.
Experts say that only successful trading for at least three to six months will show that you can switch to a real money account. This is real money, but it’s not scary to lose it.
Why is everything so serious? Errors for a beginner can be elementary. The most common is to mix up the buy and sell buttons and not managing the risk. During a quick change in currency quotes, only composure and endurance can allow you to act without errors. It means that the trading psychology plays quite a vital role in your trade performance.
No trading system – no way!
Many years ago, experienced traders realized that chaos could be defeated with the help of a system (special rules for trading).
Any chaos has its patterns:
- The price of the currency does not change in straight line, but with a lot of ups and downs.
- News is released to which currencies react.
- Managers of banks – the main participants in forex trading – have strictly set working hours during which there is high activity in trading.
The trading system, a set of rules for trading, is entrusted with determining these repeating patterns. Only the presence of such a system makes the game in the forex market work, and then you can generate a stable income.
