What is Forex trading? – www.topratedforexbrokers.com

Hello there, we start today a series of videocourses here on Top rated forex brokers, with the beginners part.

The aim is to create also intermediate andadvanced trading training courses, both from a technical analysis point of view and a fundamentalanalysis point of view, but we have to start from somewhere.

And here we are with explaining 'what is Forextrading?', and moreover why traders are attracted to Forex trading.

Forex trading means that you come to a placewhere you buy or sell a currency, but currencies are arranged in currency pairs.

You can not only buy a currency, you can buya currency or sell a currency based on the way a currency pair moves, and against anothercurrency.

For example, this is the Euro/USD that yousee here listed on the trading platform and it is under 'four hours' chart.

What does it mean? It means that every candle that you see here,green candles or red candles on the screen, they represent four hours as a timeframe.

If we want to buy the Euro/USD or to sell,for example, let's buy at market the Euro/USD, now trading at 1.

19180 – 1.

19184.

This is the quotation.

If you want to buy you always buy it fromthe right side, this is called the 'ask' price.

You buy from the 'ask'.

If you want to sell, you always sell fromthe left side, from the bid price.

When you do that, you can take a trade eitherbased on bullishness – being bullish on the Euro means that you expect the Euro to moveto the upside – or you can take a trade being bearish on the dollar – namely, you expectthe dollar to move to the downside and hence the Euro/USD pair will move to the upside.

When it comes to Forex trading, everythingrelates to the number of pips that you make.

A pip is the difference between the bid andthe ask price.

For example, now the price is 1.

1918, thereforeif we buy it here at 1.

1918, and the market moves to the upside to 1.

1980 or 1.

20, thedifference between the higher price and the entry price, or the exit price and the entryprice, represents the profit.

Or, if the market moves to the downside, itrepresents the loss.

That's Forex trading, Ladies and Gentlemen,nothing else.

Now imagine how this world functions, or nothow it functions, but how it is organised.

Imagine that this is the world.

Now, every country that we have here in theworld has a currency.

We have the USD in the United States, let'sput it here, we have the Euro in the Eurozone and so on.

So, let's actually put the Euro here as well- this will be the Euro.

We also have the Japanese Yen and so on andso forth, all the currencies in the world.

Now if you combine them two by two you willhave currency pairs.

So this will be the Euro and the USD, or theEuro and the Japanese Yen, or the Japanese Yen and the Australian dollar, the Australiandollar and New Zealand dollar, the New Zealand dollar and the Euro, the Euro and Australiandollar, and so on, you get the picture.

When buying and selling a currency pair itmeans that effectively you have an opinion about how the economies – the two economiesin a currency pair – evolve.

Because if you look at the currency pairsand how they are part of the Forex ledge board, the way it moves represents the imbalancesbetween those two economies.

The Australian and New Zealand dollar pair,for example, this one shows the weakness and the strength of an economy.

As long as the AUS/NZD pair moved from 1.

06to 1.

14 this can happen only in two instances.

Either the Australian economy outperformedthe New Zealand dollar economy, or the monetary policy in New Zealand is easiest, if you want,or is not that tight like the one in Australia.

The differences between the two economies,the differences between the two monetary policies, are seen in a currency and in a currency pair.

Traders strive to have a competitive edgeor to have an educated guess about fundamental, or about technical parts, in order to interprethow the market will move.

That's what makes a successful trader.

When it comes to Forex trading or to enteringa market, you can enter a market either from a fundamental point of view – there are alot of macro traders that look at different economic aspects around the world's regions,around the different countries and so on, and they buy or sell a specific currency pairor a specific currency like the Euro against everything else, or the dollar against everythingelse.

Or you can be a technical trader – if youare a technical trader then you have any trading platform, like this one, that offers a bunchof technical indicators to use.

If you go here to 'add indicator', you haveindicators for everything.

You have indicators for the Bill Williamsindicators, you have math transform, you have momentum, which are more or less oscillators,you have trend indicators, and so on, statistical, volatility indicators, you name it, everythingyou need to have from a technical point of view exists in a trading platform today.

If it doesn't exist it can be imported aslong as you have your own indicator, or technical approach.

There are also trading theories that we willcover in these courses, like the Elliott Wave theory, the Gartley theory, the Gunn theoryand so on, but in the end what matters is to answer a very simple question – which byits simplicity makes Forex trading so complicated is the market, any market, moving to the upsideor to the downside? Or will it range? Because if it ranges you may have some problems,because if the market ranges and takes its time on the daily chart or on the bigger timeframesand you play a negative swap – you will learn later what a negative swap is – then the balanceof your trading account will decrease, which is not something that you actually want.

To sum up, Forex trading, or the foreign exchangemarket, is the biggest financial market in the world.

There is no lack of liquidity here, you cansell and buy whatever you want.

You will always find someone willing to takethe other side of the trade.

And every day over five trillion dollars exchangehands.

This makes it not an impossible, but a difficulttrading environment.

This makes it mandatory to understand howthe market moves and what are the best approaches to technical analysis, and this is why wehave created a trading academy destined to help everyone.

We'll start from scratch with explaining variousconcepts, technical analysis concepts, explaining a trading account, pros and cons of differentbrokers and trading platforms, and so on.

Then we will move slowly but surely into fundamentalapproaches.

into central banking, into basic technicalanalysis concepts, and then to advanced stuff to see how to trade the Forex market to makea profit.

Thank you for being here and let's move on.

Source: Youtube

What is Forex trading? - www.topratedforexbrokers.com

Training video about how Forex trading works.
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