Forex Education

This information will provide you with the basic knowledge, techniques a novice Forex trader should have as you take your first steps in the fascinating world of Forex.

The Forex market has the trading volume of approximately 3 trillion a day. To be in the action you need a computer with an internet connection.

The Forex market is open 24 hours a day, so that you can be right there trading whenever you hear a financial scoop. Unlike the stock market, a smaller market with tens of thousands of stocks to choose from, the Forex market revolves around more or less eight major currencies. A narrow choice means no rooms for confusion, so even though the market is huge.

The foreign exchange market is the largest financial market in the world with a daily turnover of just over $3 trillion! Now apart from being a really cool statistic, the sheer massive scope of the Forex market is also one of its biggest advantages. The enormous volume of daily trades makes it the most liquid market in the world.

It doesn’t take a financial genius to figure out that the biggest attraction of any market, or any financial venture for that matter, is the opportunity of profit.

Forex market, profitability is expressed in a number of ways. Unlike most financial markets, the Forex market allows you to start trading with relatively low initial capital. At Fx Highsummit, you can start trading Forex with as little as $500.00

Forex market doesn’t require large initial investments because it allows you to use leveraged trading. This means that Forex trading has the profit (and loss) potential of tens and even hundreds of percent a day.

What is unique about the Forex market is that any sort of movement is an opportunity to trade. Whether a currency is crashing or soaring, there is always room for speculation, since you always have the option of buying or selling the currency of your choice. Unlike the stock market, you are not limited to speculating on rising stocks, and a falling market is just as good for business as a rising market.

Having said all that, it is important to remember that as profitable as the Forex market is, it still carries all the risks involved with financial trading. You should always be aware of the risk, and never risk money that you can’t afford to lose.

The market is always on the move, and every tiny shift in currency rates can mean profits and losses of hundreds and even thousands of dollars!

Forex market eight most traded currencies on the Forex market:

AUD Australian Dollar

CAD Canadian Dollar

CHF Swiss Franc

EUR Euro

GBP British Pound

JPY Japanese Yen

NZD New Zealand Dollar

USD U.S. Dollar

Forex trading is always done in pairs, since any trade involves the simultaneous buying of a currency and selling of another currency.

When buying or selling a currency pair, each pair has its own Bid/Ask rate, example:

Pair Bid Ask

EUR/USD 1.5419 1.5421

This means you could either Buy the pair at the Ask rate Which means:

Buy 1EUR / Sell $1.5421

or

Sell the pair at the Bid rate Which means:

Sell 1 EUR / Buy $1.5419

But where’s the opportunity for profit?

The currency pair rates are volatile and constantly changing. One way to profit is by buying a pair, then selling it at a higher rate.

The second way is by selling the pair, then buying it at a lower rate.

Trend analysis is based on the idea that what has happened in the past gives traders an idea of what will happen in the future. Although this may seem pretty basic, being able to identify when a pair is in a trend and when it isn't will help you to increase your chances to profit consistently in the Forex market. When you can identify a trend, you can estimate what direction the rate of a currency pair is going to go in. You should exploit the direction of the trend you identify by placing a trade in that direction.

If it’s an uptrend, meaning that the rate is increasing, buying the currency pair will give you a better probability for profit. If it’s a downtrend, meaning that the rate is decreasing, selling the currency pair will give you a better chance of making money.

How do I identify a trend? What are the characteristics of a trend? The simplest way to identify a trend is through the distinct patterns that the price forms. These can tell you if the market is moving in an uptrend or downtrend.

When a trend is taking place in a Forex pair, the price movements start to form peaks and valleys in the chart of that pair, which are easily identified. In an uptrend, the price movements form a series of higher peaks and higher valleys.

In a down trend, the price movements form a series of lower peaks and lower valleys:

It’s important to note that during some trading days the trend is hard to spot, some trading days show no trend (the price movements form a Range), and some time you’re bound to run into the occasional reversal, so this is not a perfectly accurate or 100% reliable indicator for trading.

Trading ranges can be really unpredictable, which is why you should always look for trading trends. It’s a good idea to stay out all together during a range, and get back in only when the markets start to trend again.

Warning: Speculating on Forex rates involves great amount of risk. Be advised that even the most sophisticated traders can't always predict market movements' directions.

If you’ve been at all exposed to the world of Forex you’ve probably heard the word “Leverage” being tossed around. But what exactly is “Leverage”? Leverage is a very important part of Forex trading, and it’s critical that you know exactly how it works and how to use it. It is the term Forex traders use to refer to the ratio of invested amount related to the trade's actual value. Forex brokers usually provide their customers with the option to trade on borrowed capital, so that traders don’t have to invest tens of thousands of dollars for the chance to make any real profit. When you trade at a leverage of 1:100, or X100, it means that for every $1 that you invest in the market, the broker invests $100. As a result, you can control an amount of $10,000 by investing $100.

Fx Highsummit provides traders with the opportunity of trading at up to 1:400 leverage.

It probably won’t surprise you when we say that with greater opportunity for profit comes greater risk. Just like slight fluctuations in currency rates can make you significant amounts of money, it can also cause you to lose your money very quickly. The higher the leverage, the larger the profit that you stand to make and the quicker you might lose your investment. A leverage of 1:400 can make you more money than a leverage of 1:100, but it also puts your initial investment at more risk.

If you trade with a leverage of 1:100 the market would have to move 100 pips against you for your position to be wiped out. On the other hand, if you trade with a leverage of 1:400 the market would only have to move 25 points against you for your position to be wiped out. We recommend first opening a position with a low 1:100 Leverage, and only once you see that you’ve hit a strong trend, consider opening one with a 1:400 leverage.

Remember, Leverage can be a trader’s best friend when used carefully, and his worst enemy when used recklessly. It is a great tool for increasing profits, in fact private traders rarely trade without it, but you should always keep in mind that the higher the leverage is – the higher the risk level involved.

Here is a to‐do list of actions to be taken as you open a trade:

‐ Identify the pair to buy/sell

‐ Decide on the initial investment amount

‐ Choose the appropriate leverage

‐ Consider applying trade limits

‐ Open trade

The Forex market is open 24 hours a day, but what are the best times to make a profit? Even though the Forex market is open 24 hours a day with the exception of weekends, not all hours are as equally good for trading. The reason that the Forex market is open 24 hours a day is that it is made up of different sessions around the globe that between them cover 24 hours. The more markets are active at the same time, the more trades are being executed, and the more action for you to cash in on.

Practice with Virtual Money Use virtual money mode for practice. Our platform provides you with a practice environment. Virtual money mode works exactly the same as real trading mode and uses the same real time rates, with the small difference of no risk involved. We recommend using the practice mode to get to know the platform and gain Forex trading experience. And even after you’ve begun trading with real money, it is the perfect place to try out your trading strategies. There is no point in risking your money to test out a possible theory, when you can do so with the same success minus the risk.

Don't forget FOREX TRADING is a RISKY business.