New to Forex | Forex235

What is Forex

Forex is the world's largest currency marketplace, where foreign currencies are bought and sold. In the forex market you can sell one country's currency and buy another country's currency. This currency market has been open for trading since 1994. Its trade can reach $6 trillion a day. In forex trading, one buys the currency of a country at a low price and sells it again when the price of that currency rises. The difference between the purchase price and the sale price is the profit. Forex trading has become a very popular business day by day because here you can get more returns than what you invest, which can reach 100% profit in one day gap. Forex on the other hand is a risky business. You need to have a good understanding of the trading methods of this market place. Stay with us to increase knowledge about forex.

Pip in Forex

Pip in the forex market is an important factor that a trader must know for his profit and loss calculations. Let's find out now what is Pip? Every single change or movement in a currency pair to the fourth digit after the decimal point is called a pip. We usually say 200 pip move in forex market today. That means 200 pips change in forex market today. Note the figure below, the fourth digit after the decimal point is the pip

Let's make this clear with another example. Suppose today at 3 pm you open a buy trade on the EUR/USD pair at 1.0900. Open your trading platform at 6 pm and see that your current price is 1.0950 which means that from 3 pm to 6 pm today the EUR/USD pair has changed a total of 50 pips.

Market Movement EUR/USD: Previous price was 1.1350 Current price is 1.1450. Then 1450 - 1350 = 100 pips movement in the market.

Exchange rates on Forex

The price of any asset in a financial market fluctuates constantly. A currency pair trades at a price quote of the exchange rate for the base currency to the quoted currency. Such a price quote is marked by a point in a technical chart. Any point is automatically connected to a previous assets quote. This is the principle of how forex charts are plotted online for a particular trading instrument

The screen of a trading platform presents two values of an asset’s quote. The lower value is called the bid price, the upper one is the ask price. Speaking about the chart of the EUR/USD pair, the bid value is the price at which the euro is sold and a certain amount of bucks are bought. Conversely, the ask value is the price to buy the euro and sell some US dollars.

Lot and Volume in Forex

Earlier in Forex there was only a way to trade through a certain amount. This fixed amount is known as a lot. To put it more simply, the unit or amount of a currency pair you decide to buy/sell for Forex trading is called a lot. If we look back a little, before retail forex brokers started, it was not possible for us forex trading enthusiasts to trade even if we wanted to, and the main reason was that we could take the minimum amount of funds we had to accept entries. No or we didn't have that amount of funds. With all the changes, forex brokers have reduced this amount so that you can start trading with $5 today.

Lot is easy. But when you go as units, you will find it complicated. So we won't go as Unite. In the forex market, we can make a profit per pips movement. That is, if the price goes from 1.1650 to 1.1660, we will have a profit or loss of 10 pips. Through lots or lots or volume we will determine how much profit or loss we will have for each pips going in our favor or against us.

We have divided Forex brokers into four categories for convenience.

Standard Lot Broker
Mini Lot Broker
Micro Lot Broker
Nano Lot Broker

At a glance the structure of the lot is not seen

Name of the lot	The number of units
Standard	100000
Mini	10000
Micro	1000
Nano	100

Now let see how to calculate the lot.

Standard Lot Broker 1 lot= $10 per pips
Mini Lot Broker 1 lot = $1 per pips
Micro Lot Broker 1 lot = $0.1 per pips
Nano Lot Broker 1lot = $0.01 per pips

That means if you open a trade with 1 lot in a standard lot broker and 10 pips go in your favor, your profit is 10*10=$100, but the corresponding loss is $100. This is how everyone calculate lots.

How does forex work

Forex, a global financial arena interconnected by a ubiquitous communication network, hosts a diverse array of participants, including major banks, investment funds, and individual traders impacting exchange rates. While smaller firms and retail traders may lack the financial clout for independent market entry, they can engage through intermediaries like brokerage firms or dealing centers.

Individuals are drawn to Forex trading due to its accessibility as a potential income source. To substantiate this, FOREX235 offers varied trading accounts, each specifying a unique starting deposit and service package. Forex caters to those willing to invest even modest amounts. While a solitary retail trader may not single-handedly sway market sentiment, the collective impact of numerous private traders stands as a formidable force, influencing the exchange rates of assets alongside larger market players. The democratization of market participation underscores the dynamic nature of Forex as a financial ecosystem.

What assets are traded

The heartbeat of Forex lies in its trading instruments — the currency pairs. Among them, major pairs stand tall, pairing the US dollar with actively traded currencies like the euro, Japanese yen, Swiss franc, and pound sterling, distinguished by symbols like EUR/USD, USD/JPY, USD/CHF, and GBP/USD. Notably, cross currency pairs exclude the US dollar, allowing any currency to engage in mutual exchange. Despite trailing major pairs in popularity, they hold a significant market share. Enter the exotic currency pairs, comprised of thinly traded and illiquid currencies, constituting at least 10% of all Forex transactions.

FOREX 235 extends a comprehensive list of tradable currency pairs, easily accessible on their dedicated webpage. Furthermore, each forex instrument is seamlessly available for Contract for Difference (CFD) trading, ensuring a versatile and advantageous trading experience. This rich array of options underscores Forex's dynamic landscape, accommodating traders with varied preferences and risk appetites

How does forex work

Forex, a global financial arena interconnected by a ubiquitous communication network, hosts a diverse array of participants, including major banks, investment funds, and individual traders impacting exchange rates. While smaller firms and retail traders may lack the financial clout for independent market entry, they can engage through intermediaries like brokerage firms or dealing centers.

Individuals are drawn to Forex trading due to its accessibility as a potential income source. To substantiate this, FOREX235 offers varied trading accounts, each specifying a unique starting deposit and service package. Forex caters to those willing to invest even modest amounts. While a solitary retail trader may not single-handedly sway market sentiment, the collective impact of numerous private traders stands as a formidable force, influencing the exchange rates of assets alongside larger market players. The democratization of market participation underscores the dynamic nature of Forex as a financial ecosystem.

Money management in Forex

Money management is the lifeblood of the forex market. Because, only your strong money management can protect you from any big loss. In one word it can be said that exactly how you can safely use the main balance of your forex trade in which process and how much you keep in hand for trade, how much you will voluntarily lose if the trade is negative and how much profit you will make if you profit, this is money management. Money management is incredibly important for a successful and risk-free trader.

All the benefits that can be gained by following money management:

Money Management will manage your trading capital in a proper way.
Mathematical formulas will give the formula for generating time-based returns of your capital
Will generate risk free profit and loss ratio of your trade.
Helps in creating proper and improper trading.
Will generate safe return formula of your capital.
Will save you from account firing.
Long and Short time will help to trade in different concepts.
Will confirm when you trade this formula.
Your Forex Ultimate Goal will give you the right management of what could be.
Will help in stability like long live in the market.

Effective techniques of money management

Money management helps minimize your trading losses, maximize your profits and increase your trading account capital. Many newcomers to the market tend to neglect money management in forex trading, as a result of which new traders are exposed to losses as soon as they enter the market. Many lose their trading account balance in a very short time due to trading without understanding. Therefore, there is no alternative to money management to survive in the forex market. So let's know those money management techniques.

Know the risk of each trade:

Know the risk of each trade before trading. The maximum number of dollars you can lose per trade is called the risk per trade. Many traders recommend taking 2 to 3 percent risk per trade. This will save your trading account from going to zero.

Always use stop loss:

Most traders feel very negative when they hear stop loss. Actually, stop loss is a way by which you can keep your trading account safe from any unwanted loss of your trading. Stop loss should be used at right place as per analysis rather than stop loss based on guesswork.

Risk Reward Ration:

Always trade according to risk reward ratio. The risk reward ratio should be at least 1:2 or 1:3. If you take risk $200 per trade you need to profit $400 or $600.

Proper use of leverage:

There is no substitute for leverage to earn more with less investment. Although many brokers offer higher leverage, but too much leverage can be detrimental to your account. Not using proper leverage can affect money management plans.

Proper use of leverage:

There is no substitute for leverage to earn more with less investment. Although many brokers offer higher leverage, but too much leverage can be detrimental to your account. Not using proper leverage can affect money management plans.

Trades should not be taken based on emotions:

The biggest problem for new traders is emotion. New traders constantly lose by trading only on emotions. Repeated stop loss moves are not holding profit trades but holding loss trades for months. Not wanting to accept loss. Breaking money management rules suddenly, over trading etc. and many other things are done under the influence of emotions. If you have confidence in your analysis, let the market prove that your analysis was correct.

Best trading session in forex market

We all know that forex market is open 5 days 24 hours a week from Monday to Friday. It is very important to know when and what time we will trade within these 24 hours. Because many times it is seen that the movement of the market increases too much and sometimes we see that the market is stagnant at the same place. If we trade during market movement we can make good profit. And when there is no market movement, there is a high chance of loss when trading. So it is important to know when to trade and where not to trade.

The Forex market is divided into several sessions.

Sydney Session
Tokyo Session
London Session
New York Session

In these four sessions the market movement is substantial. And in these four sessions, the market is heavily traded. So from these four sessions we have to choose the ideal session and we have to trade in those times. So let us know when those sessions start and when they end.

1. Sydney Session:

First up is the Sydney session. The Sydney session starts GMT at 9 PM and ends GMT at 6 AM when the AUD currency is heavily traded and other currencies are also traded.

2. Tokyo Session:

Second is the Tokyo or Asia session. The Tokyo or Asia session starts GMT at 12 AM and ends GMT at 8 AM. Then the JPY trades more with other JPY cross currencies traded. And there are many news and releases during that time, so the market movement is very high

3. London Session:

The London session is a very important session, and it is said that the most powerful session in the forex market is the London session. The London session starts GMT at 7 AM and ends GMT at 4 pm. A lot of transactions take place during this time and various news are released during this time. So we can make good profit if we trade at this time because the market movement is very high at that time.

4. New York Session:

The last session is the New York session. This is another very powerful session. You know that America is the most powerful country in the world and their economic status is the most traded in this session. Market movement is most noticeable in this session. This session starts GMT at 12pm and ends GMT at 9pm. All pairs with USD are heavily traded in the New York session.

Most interestingly, the London session overlaps the New York session at 12pm GMT. So, if you trade at this time, you have a higher chance of making a profit. This is an ideal time to trade.

What are the types of movements in the forex market?

There are two types of movements in the forex market. One is bullish movement and the other is bearish movement.

1. Bullish movement:

Simply put, bullish movement is an upward trend in the forex market, which we call an uptrend. Then the dominance of buyers can be observed in the market. In a bullish market, buyers open trades below the price and book profits until the end of the uptrend, i.e. when the market reverses.

2. Bearish movement:

Simply put, bearish movement is the downward trend in the forex market, which we call a downtrend. Then the dominance of sellers in the market can be seen. In a bearish market, sellers open trades on the upside and book profits until the end of the downtrend market reversal.

How To Read Charts In Forex:

Let's look at the three most popular types of forex charts: line chart, bar chart, and candlestick chart.

1. Line Chart:

It is the most basic of all forex charts. The line chart is the simplest in forex, connecting closing prices over time with a line. It's straightforward, showing how a currency's value changes. While it lacks details like opening and low prices, it effectively tracks closing prices. This simplicity makes it easy for traders to grasp the currency's overall trend within a specific timeframe, aiding in decision-making based on accurate closing price data.

2. Bar Chart:

The bar chart in forex goes beyond the line chart, displaying not just closing prices but also opening, high, and low prices for a period. It consists of vertical bars with a left dash for opening and a right dash for closing. The height of the bar represents the currency's trading range (low to high). Commonly known as OHLC charts (Open, High, Low, Close), they offer a comprehensive snapshot of a currency's performance, aiding traders in analyzing price movements and making informed decisions.

3. Candlestick Chart:

Candlestick charts, beloved by Forex traders, are like bar charts but visually more appealing. They focus on the opening and closing prices of a trading period, using candlesticks to represent a currency pair's performance. Unlike the line chart, they detail the opening, high, low, and closing prices. Each candlestick's height indicates the period's high-low range, and its width represents the difference between opening and closing prices. These charts provide a clear and aesthetic way for traders to analyze market movements, aiding in decision-making by capturing essential price information.

Conclusion

Entering the Forex market isn't akin to a casual gamble; it demands dedicated effort and continual self-improvement. Contrary to a quick-money mindset, success in currency trading necessitates diligence. View the global market as a potential income source, committing to learning, practicing, and assimilating successful strategies. Trading isn't a game of chance; it's a discipline requiring consistent effort. Approach it with a mindset geared towards continuous learning, training, and the application of proven methodologies. Transforming the Forex market into a reliable income stream mandates commitment, education, and strategic refinement. Success doesn't come effortlessly, but with dedication, one can navigate the complexities of currency trading and build a sustainable source of income.