Forex trading is a 24 hours’ market.
Wouldn’t it be amazing if you know the best times to trade in these hours depending on the currency pair you are trading?
On this page:
You will learn 3 things. 1 how to leverage in Forex, 2 how to know the direction you trade in and 3 How to know the best time to trade in a specific day.
I’m excited to share this set of information with you.
Let’s get started.
1. How To Leverage In Forex Trading
A Forex trading for beginners article isn’t complete without touching how to leverage.
On this note…
… I would like to tell you that this article is the second in the series of our forex trading for beginners’ guide.
Back to leverage, when you are trading these days:
No matter what you trade, you do it using leverage. For example, …
If you have a 1000-dollar position you shouldn’t trade the whole amount.
Currencies don’t move drastically – they move slowly. So you might have to trade a little percentage of the money. And in this situation you can control a much bigger financial position with the small money.
Using high percentage gives you a potential for big profit…
… and on the other hand you can get a big lost.
That is risky which is why you should manage your money using leverage.
Other important thing you can do to manage the risk in Forex trading are Stop Lose.
When you trade, what direction are you actually trading in?
Read the next tip.
2. What Direction Are You Trading?
Currency pairs can be difficult to understand for beginners
I explain that in first article found here, anyways.
When you click and buy GBP/USD, a beginner will ask you:
“what am I buying? Is it GBP or USD? Am I saying that the Dollar will go up or the Yen?”
I understand that it can be a little trick at first. I had similar challenges when I was starting out in Forex trading.
But for me to explain it better, I will make use of the image below.
This can be tricky in the beginning; I don’t doubt that. What I know is that you can learn and understand it just like every other knowledgeable trader you know.
So this is it:
Using the picture. If you buy GBP/USD, you are saying that the pound is going to go up.
Which means that the chart in the picture is going to go up and the US Dollar is going to drop.
In other words, you are saying that the pound’s value will increase against the dollar.
I think this simple example is straight forward and easy to remember.
Still using that picture above. If you bought GBP/USD in the beginning of 2018 and you sell in August that same year, you will make profits.
It doesn’t mean that you trade will take months. No.
As alternatively, you can sell if you think that pound is going to come down.
So when you buy or sell a current it the currently on the left that you are buying or selling against the other one.
Next you will find out what is Forex trading hours and how you can use it as an advantage.
3. Forex Trading Hours
When talking about hours, the Foreign Exchange market is a complete 24-hour market.
Say for example in the UK, trading will start Sunday night at the UK time and it continues round the clock till Friday evening.
The same thing starts again on Sunday and it continues like that.
You should not be too concerned about this.
This is another place where you should use stop losses and take profits – you set the level you want to come out of profits and where you want to come of lose.
Traders don’t watch the market 24 hours just because Forex is a 24-hour market.
Rest and use these tools to your advantage.
We have come to the end of the forex trading for beginners article.