How to trade?
An example of profit-making powered by the platform Lexatrade.com
- Select the direction of a transaction.
- For example: to buy euros and sell dollars.
- Determine the amount of a transaction.
- The platform Lexatrade.com. automatically gives you the leverage level х200. Thus, having on the account $1000, you can open transactions up to $200 000 dollars. In this case, your profit is counted from the total amount of the transaction.
- Select the level or amount of “Stop Loss” (in other words, if euro suddenly starts to fall, at any moment you can automatically close the transaction to limit your losses).
- Establish the “Take profit” level to automatically fix the profit.
- If all values are correct, click “Confirm”.
So, if you chose the amount of 100,000 euros, bought the euro at the rate of 1.2810 and later sold it (closed the position) at the rate of 1.2890, as applicable, your profit would be:
100 000 * (1.2890 – 1.2810) = 100 000 * 0.008 = $800 dollars.
How to deposit?
You can deposit to your account by credit card Visa / Master Card, bank transfer and payment online systems: Neteller, CashU. The Lexatrade.com platform is equipped with a convenient and reliable interface of depositing and debiting with modern means of protection against hacking.
To deposit your account:
- Go to your personal account on the page Lexatrade.com
- Click Deposit
- Select a convenient way of payment
- Fill out the suggested form
Do not make the mistake of other newcomers. Use the “Stop loss” – an automatic order to close the transaction at that level of losses that you consider acceptable for yourself.
For example: You open a transaction to sell EUR / USD (euro against dollar). You earn, if the euro falls, and as applicable, you bear losses, if the euro rises. “Stop loss” ensures that your loss will not exceed the amount you specified. At the moment when your loss is equal to that amount, the transaction will be closed automatically, even if you are not near a computer.
For the “Buy” transaction the price level of “Stop loss” is set below the order price; for the “Sell” transaction the price level of “Stop loss” is set above the order price. The price levels for stop-losses are usually determined by the maximum (sell transaction) or minimum (buy transaction) price of this or the previous trading day.
What is Forex?
Forex is the international interbank foreign exchange market (short for Foreign Exchange Market). The daily turnover of the market is about 4 trillion dollars, which makes Forex one of the largest branches of the world economy, and an attractive investment field for private investors. Investment earnings in the Forex market are available to everyone.
The operational principle of the market is quite simple. Forex is a global virtual space for trades. Market participants are national and commercial banks, insurance companies, investment funds, brokerage firms and private investors acting as sellers or buyers of various currencies.
Trading in the market continues 7 days a week 24 hours a day, excluding holidays. During trading, the degree of supply and demand is constantly changing, due to this, the value of currencies also changes. The change in the price of a particular currency depends on the amount of other currencies offered for it.
For example, a transaction for the sale of 1 euro for 1.1769 dollars has just been completed, and in a second there will be a new transaction for the sale of 1 euro for 1.1767 dollars, this means that for a second the euro rate has decreased by 2 pips. This price change is reflected in the fourth digit of the quote after the decimal point.
Currencies in the Forex market
All world currencies are traded in the Forex market, however, the main volume is occupied by US dollars, euros, Swiss francs, British pounds, Japanese yen, New Zealand dollars, Canadian dollars, South African rands, Singapore dollars and Mexican pesos. A total of about 70 currency pairs are traded in the Forex market.
The Forex market is also a virtual trading platform for other liquid trading instruments, such as: shares of the world’s largest companies, index shares (CFDs), futures in the commodity markets, precious metals – gold, silver, platinum and palladium, and oil. Despite the differences of these assets, the principle of trading here is the same.
Geography of Forex
The working areas for the Forex market’s banking operations are the regional currency markets interacting with each other using the latest information technologies. The main players are the New Zealand and Australian currency markets (Wellington, Sydney), Asian (Tokyo, Singapore, Hong Kong), European (London, Frankfurt am Main, Zurich) and American (New York, Chicago, Los Angeles) markets. Due to the fact that the markets are located in different parts of the world and the system of time zones adopted worldwide, the Forex market operates around the clock. Only once a week, from 22:00 GMT on Friday, when the American exchanges close, and until 21:00 on Sundays, when the currency trading in New Zealand starts, the market takes off for the weekend. Also, exchanges do not work during major holidays.
How to earn in the Forex market?
The work of a private trader in order to profit in the Forex market is to monitor the dynamics of currency exchange rates and open deals for the purchase or sale of currencies, shares or precious metals. An important task of the trader is to predict the movement of the market based on various types of market analysis. The basis for income in Forex is the accuracy of the forecast toward the fluctuations in exchange.
Example of a typical Forex deal:
According to your forecast at a certain point, the dollar’s exchange rate against the euro is going to increase. Based on the forecast, you give the order to open the transaction. If the market justifies your forecast, then the transaction generates you a certain profit. The size of the profit depends on the size of the transaction and on how much the exchange rate has increased. When the profit reaches the limit you have planned, you can fix it by giving an order to close the deal. If your forecast isn’t accurate, you sustain a certain loss (depending on the size of the open transaction and on how much the exchange rate has decreased).
You can also choose the time at which the transaction will be opened. Changes in rates occur constantly, sometimes every second, and transactions can give results in a very short time. It is this pace that attracts investors. The unique speed of operations in the Forex market allows providing traders with the highest possible level of potential profit.
How to minimize risks?
Of course, any forecast may not be accurate, and the transaction may close with losses. In order to limit the possible loss, you need to set the limit. For example, you opened a deal for $100 with the forecast that the dollar will grow against the euro. You decided that in case of failure, your loss should not exceed 10% of the funds you invested in your deal, so you pre-set the appropriate order on the trading platform – to close the deal in case of a loss of 10% (this is called Stop loss). In this case, if you lose 10% of the invested funds, the transaction will automatically close, you will lose only 10 dollars out of 100, and the balance in the amount of $90 will return to your personal account (deposit). In the event that Stop loss is not set, the losses can be as high as $100. Stop-loss limits the allowable loss levels.
Trading in the Forex market is associated with certain risks of losses, the basic law of the financial world works here: the higher the profitability, the higher the risks. Market experts recall the need to take into account the high risk level in this market. Do not risk unnecessarily and do not invest in operations amounts the loss of which will damage your personal budget. Soberly assess the risks and your opportunities.
How to enter the Forex market?
In order to work in the Forex market, you do not need a special financial education, an office on the London Stock Exchange or on Wall Street or additional equipment. Modern Internet technologies have made the Forex market available to you almost anywhere.
Modern and technology-based trading platforms take on a role of your private office. The platforms for online trading are provided to private traders by professional Forex brokers.
These companies accumulate the transactions of their clients-traders and represent their interests in the interbank market. It should be noted that brokers are not interested in the effectiveness of their clients’ transactions, since they act as intermediaries and benefit from spreads with which transactions are made.
The platform for online trading gives the following opportunities:
- registration as a trader and opening of a trading account,
- wide range of assets for profitable trading,
- access to current Forex market forecasts,
- set of Stop loss and Take profit on the charts of the platform,
- the usage of the technical adviser Autochartist,
- access to the necessary financial information,
- deposits and withdrawals,
- immediate execution of orders to open or close the transactions.
Forex and currencies: how currencies work in the market
Traditionally, one of the most profitable types of financial transactions is trading based on the exchange rate movements between different currencies. It is the basis of Forex trading. The constant (almost every second) update of exchange rates in the market provides the opportunity for dynamic and highly profitable trading.
Volumes of trading in the Forex market
Forex is an international market for buying and selling currencies, the daily turnover here is about 4 trillion dollars. The main trading platforms are currency markets located in various financial centers of the world: New Zealand (Wellington), Australian (Sydney), Asian (Tokyo, Hong Kong, Singapore), European (Frankfurt am Main, Zurich, Paris, London) and American (New York, Chicago, Los Angeles) currency markets.
The Forex market is not affected by any crises, as it is global, does not tie to any assets and accumulates the highest liquidity degree.
Another advantage of trading in the market is the fact that spreads paid by a private trader while buying or selling a currency in the Forex market are far lower than the margin lost at the currency exchange offices.
Dynamics of exchange rates in the Forex market
Macroeconomic indicators of the state of the economy of the world’s leading economic powers – the US, Japan, Canada, the countries of the euro zone, are the main factors affecting the state of the Forex market (Forex rate).
Current economic information is one of the leading aspects of successful trading in the market. The second no less important factor necessary for effective trading is the technical analysis of the exchange rate fluctuations, on the basis of which the Forex forecasts are formed. Forex trading strategies, which you can use for your operations, are formed on the basis of current economic information and technical analysis data.
Some popular trading strategies are an algorithm of actions-reactions of a trader to the achievement of certain market indicators by a certain currency. By combining trading strategies and forecasts, you can develop your own Forex trading strategy.
Does Forex result in success?
According to the history of world finance, Forex trading often becomes one of the most successful investment tools for many world-famous businessmen. It was the Forex market where famous investors, businessmen and financiers George Soros and Warren Buffett carried out a whole series of brilliant financial operations that generated them record profits.
Currency behavior in the Forex Market
Trading in the Forex market is based on the principle of changing the exchange rates of currency pairs (for example, EUR/USD, USD/GBP, EUR/GBP, etc.). A profit is formed based on the dynamics of mutual exchange rates of currencies included in such pairs. For example, in the transaction “the growth of the US dollar against the euro”, a currency pair US dollar – Euro (EUR/USD) is used.
In such pairs, the first one is the base currency of the quote, and the second one is the quote currency. For example, the symbols EUR/USD 1.3500 mean that 1 euro at the moment costs 1 dollar 35 cents.
Traditionally, currency pairs in the market are divided into conditional groups:
- Currency pairs, in which the base currency is the national currency, and the US dollar is used as the quote currency (EUR/USD, GBP/USD, AUD/USD, NZD/USD, etc.);
- Currency pairs, in which the base currency is the national currency, and the Japanese yen is used as the quote currency (USD/JPY, EUR/JPY, GBP/JPY, AUD/JPY, etc.);
- Currency pairs, in which the base currency is the national currency, and any third currency (USD/CHF, EUR/CHF, GBP/CHF or USD/CAD, EUR/CAD, GBP/CAD, etc.) is used as the quote currency.
The currencies that are inside these groups are called the allied currencies against the US dollar (as in the first of the presented groups), against the Japanese yen (second group), against the Swiss franc or the Canadian dollar (the third one). Usually, the development of the movement of exchange rates of allied currencies roughly coincides.
Currencies in the Forex market
More than 70 currency pairs are traded in the Forex market. Among the market currencies are US dollars, Euro, Swiss francs, British pounds, Japanese yen, Australian dollars, New Zealand dollars, Canadian dollars, South African rands, Singapore dollars, Mexican pesos, Israeli shekels, Norwegian korunas, Swedish kroner, Danish kroner, etc.
Traders, like people of other professions, have their own professional slang. Сable is slang for British pounds sterling (GBP); loonie is slang for Canadian dollars (CAD); ossi, kangaroo is slang for Australian dollars (AUD) ; kiwi is slang for New Zealand dollars (NZD).
Most transactions are made with the most popular currencies, such as US dollars, British pounds sterling, euro and yen.
Success in the Forex market
The Forex market: history
The history of the Forex market goes back to the Middle Ages, the currency market has a long history. Lombard merchants, who in those far-off days built a chain of exchange offices across Europe, were the first brokers.
In addition to private merchants, such large associations as, for example, the once mighty Order of the Knights Templar, who made contributions to their treasury through financial and exchange operations, facilitated the development of this business.
When in the 18th century paper money came into use and the need to store large amounts of gold, silver or copper ceased, the foreign exchange market started its rapid development.
The market that we know developed around the 1950s. And the spread of the Internet in the 90s made the Forex exchange available to the majority of the world’s population. Now, everyone can become a trader and make profit in the market with the help of brokers and dealing centers.
Today, the daily turnover of the world currency exchange Forex is about 4 trillion dollars. The basis of the market is the exchange and banking platforms of Sydney, Wellington, Tokyo, Singapore, Hong Kong, London, Zurich, Frankfurt am Main, New York, Chicago and Los Angeles.
Only once a week, from 22:00 GMT on Friday, when the American exchanges close, and until 21:00 on Sundays, when the currency trading in New Zealand starts, the market takes off for the weekend. Also, exchanges do not work during major holidays.
The Forex market is unique in terms of its investment opportunities. The pace of the market allows you to profit from investment within the shortest possible time. Sometimes the profit is really huge, and investors are getting rich at an ever-increasing rate.
George Soros and his unique deal
George Soros, the most successful Forex traders, billionaire, an American financier and philanthropist, is known to many. Soros was the son of ordinary Hungarian immigrants and began his financial career practically from scratch. In 1969, he founded the Quantum Foundation, which became his first serious business project. In the first years of work, the fund, thanks to the financial genius of Soros and its successful investments in stocks and bonds and a risky, aggressive game in the Forex market, managed to reach the level of 3000% of profit per year.
The main success of Soros was the famous combination with the pound sterling, implemented in 1992, when Soros with his machinations brought down the British pound sterling and earned about 2 billion dollars.
Warren Buffett: Philosophy of Success
One of the richest people in the world, American billionaire Warren Edward Buffett formulated the principles of investment, which became the basis for success in Forex.
The five most important investment principles of Warren Buffett:
- Success comes to those who are patient, who know the market and business in general, and also who have great self-discipline.
- If you have found a great object for investment, do not pay attention to unfavorable forecasts of the market or the economy as a whole.
- Do not invest only in order to invest money, and if there are no suitable objects, keep your capital in cash.
- Determine for yourself what you are versed in. Invest only in those areas that you have learned well.
- Do not borrow or invest “on credit”.
Principles of money management in Forex
Successful trading requires several components. One of the most important is a broker-partner.
The first steps of the trader
The selection of a reliable broker is a key to successful and comfortable work in Forex. It is really an important step, because the broker becomes your partner and your work in the market depends on his honesty.
Brokers benefit from spreads – this is a commission for foreign exchange transactions. Make sure that the broker you have chosen does not have high spreads (starting from 2 pips) because each pip is your profit. An important criterion for decency of a broker is the absence of a fee for making a deposit or withdrawal of funds. The broker must also provide security and confidentiality guarantees in respect of personal data and bank details of traders.
Registration on the online platform. The platform for trading gives an opportunity to carry out transactions in the Forex market. First you need to register on the platform, carefully filling out the forms with the personal data of the trader. At the end of registration, the requisites for making a deposit will be available.
The first deposit and, if necessary, further replenishment are available in a variety of ways:
- Bank credit or debit card
- Various e-wallets (Web Money, Yandex.Money, PayPal, etc.)
- Bank transfer
If the bank charges a commission when you make a deposit, our company compensates it in full. The balance of the deposit is reflected on the platform, in the private account of the trader, as well as in the history of transactions, where all trading transactions, profits and losses for each transaction and commission withheld by the broker are indicated.
Example of how to make money in Forex
For example, based on market analysis, you assumed that at that moment the rate of the pound would start to rise against the dollar. On the trading platform, you opened a deal “Growth of the pound against the dollar” for $100 with a leverage 1:200. When opening a transaction, the exchange rate was 1.9499 with a spread of $2. Your analysis turned out to be correct, the pound began to grow and in 20 minutes reached the mark of 1.9511, which is 12% of profit or $12. We subtract a spread of $2 and get $10 of net profit, which, when the transaction is closed at that moment, is fixed and goes to your account.
Now, you have 110 dollars on the balance, this amount can be used in further trading, or you can withdraw this sum.
Withdrawal of profits
In case of successful trading and making a profit, you can withdraw this money from your account. Fill in, print out and sign the form for the transfer of funds in a way convenient for you (bank card, bank transfer, e-wallets), scan and send us in email. You will receive the money in accordance with the bank terms of money transfers.
Strategies for making money in Forex
It is quite easy to achieve a success in the Forex market. In order to trade successfully, you need to own financial information, correctly interpret it and, based on the conclusions drawn, make a decision to open a deal. With this approach to the market, mastering certain skills and a reasonable attitude to risks, success will not take long.
Fundamentals of work in the Forex market
For successful work, the trader needs certain skills and knowledge, including:
- Knowledge of professional Forex terms. For example, a deal opened for the purchase of a base currency calls “long” and a deal for the sale of the same currency calls “short”, the maximum price is indicated by the word “high”, the minimum price – “low”;
- Knowledge of the basic principles and laws of the currency market, the nature of the behavior of trading instruments and ways of their interaction;
- Knowledge and constant monitoring of the world economic situation, understanding of the processes affecting the world foreign exchange market, macroeconomic indicators of the world’s economic powers. Small transactions ($100) are under the same influence of the global economic situation as the budget of any country, do not forget about it at the time of opening deals. Each trader must have direct access to reliable information.
- Do not forget about choosing a reliable partner which can provide security for your money when entering the market.
Styles of trading in Forex
Each trader chooses a style of work independently, according to his/her expectations from trading, the size of the investment, the desired profit and taking into account his/her own character.
For some traders, it’s important that you can trade in Forex using the minimum time. There are also those who are waiting for a deal of which they will be 100% sure. Others are ready to follow in the footsteps of the great and fight to the end, opening deals of the century. There are traders who, on the contrary, expect a small but instant profit and use a strategy called scalping, based on the quick fixation of literally every dollar earned.
To achieve stable success, it is necessary to develop a consistent and proven strategy. The basis of such a strategy is often the analysis and the subsequent market forecast.
Market experts have developed a set of trading strategies that, if properly applied in a given market situation, will help the trader.
How to choose a strategy
It is necessary to remember that operations in the market assume a potential profit, but they have different risk levels. A competent analysis and accurate calculation will help minimize risks. Forex trading strategies are used for a more accurate prediction of the situation.
Trading strategy is a certain type of behavior and a set of actions and tactical techniques that are performed by the trader in the event of a particular situation in the market. The strategy provides an opportunity to maximize profits and reduce possible risks. So, the strategy, using the information of technical analysis, “advises” when and which transaction to open, or, for example, to wait for a while before the onset of a better situation.
There are numerous trading strategies. We consider some of them, suitable for the work of novice traders.
1. Strategy based on Bollinger Bands. The strategy is easy to apply and effective enough in moments of calm behavior, but it can not be applied at the time of sharp market movements.
2. A strategy based on moving averages. It is most effective in those moments when the market is very active, including moments of crises. The strategy is available even for traders with low initial capital.
3. Strategy based on breakthrough of a resistance level. A universal strategy, applicable for both calm and dynamic markets. A balanced and progressive strategy.