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Forex traders have one goal:profiting from the change in value of one currency against another. They do this by basing their investment decisions on which way they think forex prices will fluctuate in the future.
For example, if the US Dollar is expected to go down in value in relation to the EUR, a forex trader would sell their US Dollars and buy EUR. If the EUR then increases in value, the trader then possesses greater purchasing power to buy more US dollars than they initially had, resulting in a profit.
On the global forex market, all currencies are quoted in pairs – that is, in terms of their value versus another currency. For example, AUD/USD, GBP/EUR and USD/GBP are just a few common currency pairs.
Trading foreign exchange is quite simple and there are a range of trading platforms such as Xtrade to choose from. To place a trade, all you have to do is select whether you want to buy or sell a particular currency pair and the amount of your transaction.
The basics of Day trading
Day trading involves buying and selling of financial instruments like stocks or currency within the same trading day.
Becoming a day trader means never having worry about what is happening with your investment. Day trading means you invest and sell within the same trading day (or night depending where you are located!). This is perfect for those of us who like to play fast and have a clean slate by the end of the trading day.
There are four cardinal rules which should be part of every trading strategy.
1) Trade with the trend
2) Cut losses short
3) Let profits run
4) Manage risk.
You should make sure your strategy includes each of these requirements for success.
Trade with the trend relates to the decision of how to initiate trades. It means you should always trade in the direction of recent price movement.
Mathematical analysis of commodity price data has shown that these price changes are primarily random with a small trend component. This scientific fact is extremely important to those desiring to pursue commodity trading in a rational, scientific manner. It means that any attempt to trade short-term patterns and methods not based on trend are doomed to failure. It also explains why day trading is darned difficult and why almost no day trader is a long-term success.
Choosing the right broker like Xtrade:
Choosing a broker is important and critical moment. Nowadays there are a lot of companies which provide access to the international exchange market Forex – but only a select few that can actually be beneficial to your trading career.
How can you tell who is legit and who should be avoided at all costs? Well there are many websites out there that offer support, information and reviews. For example, a reputable platform will have many positive reviews – you can see for yourself by searching Xtrade forex reviews here. Searching sites such as these will offer you advise on which platforms to choose.
The main factors in considering choosing a broker should be:
- The amount of initial capital that you can open an account with
- Broker’s publicity and reputation, which like Xtrade, can be checked online.
- Reliable communication with a broker and technical support service
- Additional services and products for clients
- Operational convenience of software
Knowledge is everything:
You cannot be a successful trader without in-depth knowledge of how to use technical and fundamental analysis techniques. You should absolutely educate yourself following the instructions from professional sources such as Xtrade trade Academy. All of which will provide you with much of the basic information needed for beginners in trading.
