Forex trading UK – The Ultimate Beginner’s Guide to Trading Forex Online

Forex Market For Beginners

Forex is a large and rapidly growing foreign exchange market in which most of the money is contributed by banks and organizations. It is one of the biggest markets today. The concept behind this is that you must buy any of desired currency pairs like the British pound/US Dollar or Euro/US dollar, making your bet on the currency whose prices you think will increase. You buy the currency which you think will go up in the upcoming days and that is how you will earn more money than you had at the start of your business.

But it is not so plain and simple. Many people lose a lot of their money. So, in this article, we aim to help beginners understand this business.

What is it?

Many phone apps are available that give you the comfort of sitting in your homes while trading currencies from all over the world.

The main concept behind this market is that you have to speculate the price of a currency that you think will increase in the coming days. If your bid is right, the price of your currency will rise and consequently, your currency will gain more value. And you will make money.

Introduction to Forex

Before you set your foot in the market you must be aware of a few terms which are as follow:

• Currency pairs
• Pips
• Trading orders
• Spreads
• Market hours

Now we will explain the terms individually to eliminate any confusion.

Currency Pairs

In this trade, it is the most important thing you should be familiar with. As the name indicates, it is a pair of currencies that go side by side. 

For example, the British pound and the Australian dollar would be represented as GBP/AUD.  

Each currency has an exchange rate that is determined by the stock market. Let us explain this with an example. For UK-based Forex trading for the currency pair GBP/AUS, GBP is the “base” currency and AUS would be the “quote” currency. Now the exchange rate for this pair is 1.8 which means that in exchange for one British Pound you can get 1.8 Australian dollars in any market.

Now, this currency rate is not constant and changes over the second. You can choose from a hundred currency pairs to set your foot. 

The currency pairs are Major, minor, and exotic.

Majors

The most favored pair out of the lot is a major category. This pair must include the USD as one of the two currencies, the other currency can be any competent one. Like EUR/USD or GBP/USD.

Since both the currencies are of high value, this is the safest bet for newcomers. The chances of loss in this are relatively low. It is not that big a risk. 

Minors

Another safe bet for newcomers is minor currency pair. It also has two popular currencies, but it cannot have the American dollar as one of its participants.

Most sites offer you major and minor currencies to start your trading.  

Exotics

They are different from the other two pairs because they contain currencies from emerging economies, which makes them less dependable. they fluctuate more than the other two.

They can also contain the currency of a developed country but that is not so much in global demands.

Examples: USD/DKK, TRY/JPY, etc.

This pair is generally recommended to people who understand this market. 

Pips

This tells you the micro changes which take place throughout the day by the seconds. Usually, when you look for the exchange rate between two currencies you will have 4 digits after the decimal point, the last digit of this rate would be the pip. That will tell you the smallest change that can take place in the rates. The last points may be small but when talking about international markets, they can make a lot of difference. 

Except for the Japanese Yen, which shows only 2 digits after the point. 

Trading Orders

To begin your trading, you have to choose a person or a firm as your broker, who will buy and sell the currencies for you. In turn, they will ask you to choose trading orders. Some important orders that you should know before starting are:

Buy and Sell Orders

This is the basic order that you have to place to get started in the market. A buy order for a currency that you think will increase and a sell order for the currency that will reduce. You have to place both orders simultaneously. 

Market and Limit Orders

This order informs your broker when you would want to place your above order.

The market order places your order instantly, whereas the limit order defines your rates. For example, you can place a limit order of GBP/USD to 1.8100, then your broker will wait for the currency rate to drop to this before buying your GBP. 

Stop-Loss and Take-Profit Orders

This is not a compulsory order, but it is generally placed to lower the risk of loss in the market.

A stop order dampens your loss to an extent. While putting a sell order you put this order to make sure that if you lose, you do not lose more than 1% of your money. And vice versa for your buy order.

Similarly, a take-profit order puts a limit on your gains. You place a limit to how much you want to gain in a day and after you have achieved that, your bidding automatically stops. It is very much like setting your daily goals.

Spreads

A spread is a difference between the buying and the selling prices of an exchange rate. Most people calculate the spread from the pips.

It is important because it is the fee that you have to pay your broker. After you make it again equal to the spread, it will go to your broker. After this, all the profit you gain is yours to keep.

UK Forex Market Hours

You can enter the market 24/7, all seven days of the week but the UK market is usually active within the Sunday evening and Friday nights.  

We Offer Mentorship Program

If you think you are ready to go to the next level, then this is the right program for you. The Full Mentorship Program includes close supervision and mentorship to maximize your trading skills.

PROFESSIONAL TOOLS 

Practical tools to help you track and improve your trading capabilities.

INSTRUCTOR

A professional trader who will serve as your mentor, personal accompaniment, and a direct communication channel all the way.

TRADING COMMUNITY

Entering a quality community of traders who already know how to make successful trades in the market.

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