How to trade Forex?

What is forex?

The Foreign Exchange, commonly known as Forex, is the financial market reserved for the buying / selling of currencies. This market is open all the time as a stock exchange does not have a monopoly on it, which allows the Forex trader (Forex investor) to speculate on currency pairs 24 hours a day. The dollar (88.5%) and the euro (32%) are the most sought-after currencies: of the 6.950 billion dollars of daily exchanges on the foreign exchange market, half of the swaps (transactions) are directly related to the dollar, or 3.310 billion. The interest of Forex is that all transactions are carried out over the counter, i.e. there are no intermediaries between the seller and the buyer, the Forex is not regulated by a stock exchange and people who want to trade Forex must go through a broker or their bank, except when they log into a Forex trading site. However, some shares that offer derivatives are partially regulated, such as warrants which are regulatory hedging instruments.

How to get into Forex as an individual?

When a novice trader, or an expert like that, wants to trade currency pairs directly, all he has to do is go to a Forex broker or online trading site. It is important, before even starting to trade, to choose a site with a high level of regulation (control and certification by international central banks and by authorities such as the AMF, the financial markets authority) to avoid trading sites fraudulent ones that abound on the net (the AMF has drawn up a black list of these sites which is regularly updated on their site). So, all you need to do is create your online account, then choose the currency pairs to trade. Beginner traders can train on their trading platform (AvaTrade provides them with different tools such as tutorials, advice cards, expert robots that can help them make the best trades).

How is a Forex transaction executed?

When the trader wants to speculate on a currency pair, he can choose the currencies of his choice. You should know that the most traded pair is the euro dollar. If this currency pair is the most popular on Forex, it is due to the fact that it offers optimal conditions in terms of volatility, availability, spread. To trade EURUSD (euro / dollar), if the rate is 1.15, it means you need 1.15 USD to buy 1 EUR, on the contrary you will receive 1.15 USD when you sell 1 EUR. If the price of the euro-dollar pair increases (between 1.15 and 1.17), the euro is considered to appreciate against the dollar, vice versa, if the price of the pair is between 1.22 and 1.19 , the euro is considered to lose value against the dollar. This exchange rate is the range over which Forex traders will play to make profits. When the transaction is in the dollar / euro, which is rarer (we generally trade with EURUSD and not USDEUR.), The trends are reversed.

How to trade Forex online?

As an account holder on a trading site, you can buy / sell any currency pair of your choice. In the case of the EURUSD it is necessary:

✔ Connect to your chosen MT4 / MT5 interface (AvaTrade offers the two most efficient currently on the market.)

✔ Enter the “market observation” area.

✔ Choose the pair you are interested in (for the euro-dollar take EURUSD)

✔ Enter the “graph window”

✔ Choose your commercial strategy: in case of sale, select the purchase volume then click BUY; in case of sale click on SELL.

Forex trading is quick and easy, but still requires knowledge of the financial markets (operation, strategy, economic vocabulary, etc.). It is therefore highly recommended to train and practice via demo account prior to launch.

Financial Markets / Risk Warning : Investing involves risks. By investing in the financial markets, you could lose all or part of your capital. We recommend that you only invest in financial products that match your knowledge and experience. Past performance does not affect future performance, is not constant over time and does not in any way constitute a guarantee of future performance or capital.

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