Forex Trading Concepts

Forex trading is a fresh concept for many but for those in the business of trading will be familiar with the pros and cons of the same. Of all the available securities in trading, forex is considered to be the most favourable one especially for beginners or freshers in the domain. It has high liquidity and is highly volatile which makes it one of the top most preferred choice for trading. Forex trading is usually done between pairs, so unlike other assets, forex trading involves exchange of the currencies rather than buying and selling.

A beginner’s guide to forex trading

For forex trading in Delhi, the first important step to understand is the fact that every country has its own currency and the value of each currency is different from each other. As a trader you have a load of options to choose from as the there are several currency pairs categories as minor or major pairs, exotic pairs, emerging pairs among others. The forex trading market is open 24*7; hence one can easily trade FX online in Delhi as per his/her convenience. Foreign exchange is the trading market where the exchange of currencies take place. There is a large continuous trade flow in the market and hence the process of forex trading can be quite complex and risky for a new comer. Two of the most heard terms related to forex trading are:

• Forward contract – As the name indicates, it is an agreement between the 2 parties to exchange a currency on a future date at a predetermined rate
• Futures contract – It is a contract or agreement between 2 parties to take delivery of a currency at a pre-determined rate

Before the onset of the digital era, trading was usually done on the trading floors, where hand gestures were used to communicate between traders or investors. NASDAQ trading floor in India used to be a floor basically inside a financial organisation or a stock exchange where traders come together to trade different assets.

Start the trading business in few simple steps

Once all the concepts, strategies and techniques are learnt and understood the next step for a trader is to get into the practicality. Those who to hold the asset for long duration, may go for investment, while those looking for short term benefits can go for trading. Below the below steps to start the trading journey:

• Find a suitable registered trading broker. The broker will trade on your behalf and in return you have to pay him the brokerage
• Create a trading account- In case of forex, the brokerage is nil and it is usually the broker who helps you in opening the trading account
• For those new in the business can start with micro forex trading account that comparatively requires low capital investment
• It is suggested to develop your own trading strategy than blindly following other traders. A strategy should be developed as per the market trend and finances
• Never get emotionally drawn by the trade outcomes, be it profit or loss, as in a risky business, like trading, these situations are bound to happen

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Created on Sep 21st 2022 02:01. Viewed 176 times.

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