Ultimate Forex Trading Guide:

With Forex Trading To Passive Income And Financial Freedom Within One Year

(Workbook With Practical Strategies For Trading Foreign Exchange Including Detailed Chart Analysis And Financial Psychology)

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With forex trading to passive income and financial freedom within one year

What is passive income?

What is forex and forex trading?

What is the foreign exchange or currency market?

The various market participants in the foreign exchange market in detail once again

Foreign exchange transactions and currency trading

How foreign exchange trading works

Foreign exchange business with private customers

The most frequently traded currencies and currency pairs in the foreign exchange market

Market supervision in the foreign exchange or currency market

How do profits arise in foreign exchange trading?

The historical development of foreign exchange trading

The requirements for foreign exchange trading

Forex trading basic knowledge

The forex broker

The advantages of foreign exchange trading

Possibility of making profits regardless of the direction of the market

Low barriers to entry

The disadvantages of foreign exchange trading

Dubious and non-transparent brokers

Behavior of exchange rates

Learn the forex basics

What is a pip?

What is meant by majors and minors?

The Forex Broker

What does margin mean in Forex trading?

Forex trading and emotions

Choosing the right Forex broker

Documentation and analysis

Being always up to date with the latest news

Exact daily planning and precise objectives

How is a trade opened?

The correct position size at the trade opening

When does a profit arise and when does a loss arise?

Find the right forex broker

Leverage in Forex trading

The trading platform of the Forex Broker

Free demo account

Customer support and customer care

The different types of forex brokers

Deposits at the forex broker

Withdrawals at the forex broker

Crypto currencies with a forex broker

Summary of the most important criteria for finding the right forex broker

The lot sizes

The most important different types of trading

Buy and hold

Swing trading

Day trading

Scalping

Technical analysis in foreign exchange or forex trading

The basics of technical analysis

The beginnings and the origin of technical chart analysis

The different chart designs

The Line Chart

The Candlestick Chart

The Bar Chart

The different colors of the charts in Forex trading

The technical indicators

The basic principles of technical analysis

Conclusion on technical forex analysis

The fundamental analysis of foreign exchange trading

Exchange rates and central banks

Bad or good news

Which factors are important in fundamental analysis?

Interest rate development

The practical implementation of fundamental analysis

Conclusion Fundamental Analysis

Forex strategies for beginners, advanced traders and professionals

Simple strategies for beginners

3 concrete practical examples for beginners

Strategy Moving Average Crossings

Forex strategies for advanced traders or professionals

The entry signals for scalping

Combined use

Which broker is suitable for scalping?

The INSIDE-BAR strategy with a relatively high hit rate

The MACD Strategy

The GAP Strategy

The EMA Strategy

Summary Forex Strategies

Risk or money management in foreign exchange trading

Trading Psychology: How to begin thinking like a professional trader

Financial psychology - origin until today

Framing effect

Sunk cost effect

Heuristics

Disposition effect

Trading fears - The central issue in trading

Meaningful fears and meaningless anxieties

The longing for security

The view of things

The control center in the brain

The power of the unconscious

Statements of faith

Autoaggression (self-injury)

Which characterize the first years of life

The power of discipline - training the will

Stress and trading - the right dose makes the difference

Combat escape response

Stress due to loss of control

Recognizing and overcoming stress

Trading and personality

Trading trap: Thinking, believing, hoping

Small trading account - big problems

Trading with sense

Important technical terms in forex trading that you need to know

Bar chart

Basic currency/ exchange rate currency

Broker

Buy Stop Order

Candlestick Chart

Central Banks

Chance-Risk-Ratio

Course Order

Cross Currencies

Currency Pair

Day Trading

Dealing Desk Broker

Demo Account

Decentralized Market

Exchange Rate

Forex Trading

Forex Trading Software

Fundamental Analysis

Go Long or Short

Hidden Order

Iceberg Order

Indicators

Leverage

Limited Order

Line Chart

Lot Sizes

Majors and Minors

Manual Trading Strategy

Margin

Margin Call

Minimum Deposit and Minimum Stake

Momentum

Money and Risk Management

Obligation to make additional contributions

No-Dealing-Desk-Broker

Open and Close Position

Pips

Requotes

Return on Investment

Scalping

Short Position

Sell Limit Order

Sell-Stop Order

Simple Moving Average (SMA)

Scaling

Slippage

Social Trading

Spread

Stop Loss

Supports and Resistors

Swing Trading

Take Profit

Technical Analysis

Technical Indicators

Trading Platform

Trading Hours

Unlimited Order

Volatility

With forex trading to passive income and financial freedom within one year

Many people have the desire to leave the hamster wheel of working life behind them or to step back a little here. But each person, who strives here for financial freedom, independent of the work income, must be ready to take its finances into the hand. That means for this person, independently of its earned income or from national allowances to develop additional own sources of income. Here one speaks in the following of a passive income.

What is passive income?

Passive income is money and income that a person regularly receives for which that person does not work directly. This means that time is no longer exchanged for money, as it is the case in an employee-existence or as an independent person. This is usually money from passive sources of income in which this person has once invested time or money. However, these income streams must have been built up beforehand in order to benefit from them later. Passive income decouples time from income. This creates financial and time flexibility.

Especially in a time when jobs are no longer secure due to digitalization and rationalization, it is increasingly important not to be dependent on a job as an employee. Similarly, there is no source of income that is taxed as heavily as earned income. Taxes on investment returns or corporate profits are much lower. Therefore, flexibility, independence from earned income and low tax rates are important reasons to build up passive income.

An average income millionaire usually has between 7 and 10 different sources of income outside of his or her work income. One way of doing this is to build up a passive income in the world's largest market, the currency or forex market, in the form of Forex.

The following explanations in this book serve to present this field and its possibilities in detail and to show how a passive income can be built up in the world's largest market, the currency and foreign exchange market. First of all, it is a matter of explaining some of the terms used in Forex, so that even a beginner can become familiar with this subject.

What is forex and forex trading?

The term Forex (short for Foreign Exchange Market) is the most common name for the foreign exchange or currency market today. Also the terms FX market, foreign exchange market or currency market are used colloquially. The Forex market is the most liquid and largest market in the world, which includes all the currencies existing in the world. In this market, the demand for foreign exchange meets the supply of foreign exchange and the exchange of foreign exchange takes place at the current exchange rate.

There is no central marketplace where this foreign exchange trading is carried out, because the trade is mainly between the market participants.

Forex trading is then understood to be the sale and purchase of foreign exchange or currencies. In doing so, investors try to profit from the exchange rate changes and thereby make a profit. In order to maximize the profit amount, very high financial levers are used. However, the use of high financial levers also means the risk of realizing high losses, which can far exceed the original investment.

What is the foreign exchange or currency market?

The foreign exchange or currency market is the largest financial market in the world with a daily turnover of more than 5 trillion dollars. In contrast to the floor exchange, trading is possible here 5 days a week, 24 hours a day. Trading is usually possible practically from Sunday night until late Friday evening. Thus, trading is possible from Sunday to Friday non-stop without interruption.

The foreign exchange or currency market is a sub-sector of the financial market, which also includes the capital and money market. As already mentioned, the foreign exchange market cannot be localized to a specific location because trading in foreign exchange is primarily conducted between market participants and the foreign exchange exchanges have largely been abolished or have lost much of their importance. The market participants in the foreign exchange market are, among others, central banks (here, the foreign exchange market intervention also plays a role), credit institutions, the state, large companies from the private sector, medium and small businesses and private households, this for their foreign exchange transactions must then also turn to the credit institutions. Trading on the foreign exchange market is done with foreign exchange (book money in foreign currency).

The participants in the market as well as the trading objects on the foreign exchange or currency market

The Foreign Exchange Market instrument is used to exchange domestic currency for foreign currency and vice versa. As a result, the purchasing power of the domestic currency is then exchanged for foreign currency. The foreign exchange markets are mainly shaped by foreign exchange trading.

Various market participants are active in the foreign exchange market. These include, as already mentioned, banks and credit institutions, larger industrial companies, private foreign exchange dealers, trading houses and foreign exchange brokers. Enormously important market participants are the central banks. For economic as well as political reasons, the central banks have the possibility to intervene in the foreign exchange markets with foreign exchange market interventions (for example, to restore a foreign exchange market balance).

In interbank trading, the majority of foreign exchange trading is carried out over the counter. Since the foreign exchange exchanges were hardly involved in foreign exchange trading, they have either been abolished or greatly reduced (in Germany, this took place in December 1998). The essential function of the foreign exchange markets, the official determination of exchange rates, is nowadays determined by reference values (such as EuroFX or as a trading medium in the form of online trading via trading platforms, such as the electronic brokerage EBS, or via telephone trading).

The trading object used here is foreign currency, which has a currency designation representing its country of origin. The pound sterling was introduced as the first important trading currency in 1750. This was followed by the Swiss franc in 1850, the yen in 1871 and the US dollar in 1875. The youngest currency, the euro, was introduced in 2002.

Nowadays, the foreign exchange trade between the individual banks is handled electronically in practice. Very large amounts are traded between banks and credit institutions within seconds. Here then exclusively book money is used and also transferred.

The various market participants in the foreign exchange market in detail once again

Investment banks

Here one speaks also of institutional dealers, which are composed of large financial institutions as well as banks. Through them, liquidity is made available to the foreign exchange market. These traders then trade among themselves on the interbank market. This is, as already mentioned, an electronic communication network, which is supported by predetermined credit lines between the participating banks and credit institutions. This interbank market basically consists of a network of institutional foreign exchange dealers who trade currencies among themselves in order to keep the entire banking system liquid. According to the Bank of International Settlements, this network of foreign exchange dealers accounts for approximately 40 percent of the daily turnover in the entire foreign exchange market.

Central banks

Central banks, such as the Federal Reserve (FED), the Bank of England or the European Central Bank (ECB), are responsible for the money supply, interest rates and the supervision of the banking systems in their territories. Due to the fact and in the context of their task to manage monetary stability and growth, they have a great influence on the foreign exchange market.

The companies

Companies are also among the major customers of institutional traders. Foreign exchange is indispensable for any international trade. In every international transaction in which services or products are sold to corporate clients or purchased from their suppliers

are required here for the sale or purchase of foreign currencies. Especially in today's age of globalization, foreign currencies are an indispensable part of every large company.

The institutional and retail traders

Traders are the most diverse group of market participants in the foreign exchange market. These market participants profit from the price fluctuations. Traders working for hedge funds are a very influential group of currency speculators and are also able to influence currency rates due to the size of the stakes they place in the foreign exchange market at regular intervals. This type of market participants is also a very knowledgeable and experienced clientele. Such hedge funds invest on behalf of pension funds, private individuals, companies and also to some extent governments. These professional traders use various techniques, including discretionary and algorithmic trading or a combination of both, as well as fully automated trading.

The retail traders are the private traders. These are small private investors who want to earn a reasonable income in Forex or foreign exchange trading. The problem here is that for this purpose, a sufficient and good education must be available to be able to survive especially in the foreign exchange market, because the smallest wrong decision triggers corresponding consequences and thus it can quickly come to losses.

Foreign exchange transactions and currency trading

Foreign exchange trading is understood to be the interbank market. There the trade of internationally active banks and credit institutions takes place in the form of standardized foreign exchange transactions with the trading object foreign exchange. Foreign exchange transactions consist of the basic forms of forward exchange transactions, spot exchange transactions and the resulting currency swaps (derivatives) and currency options.

The forward exchange transaction

A forward exchange transaction is also referred to as a forward, outright or solo transaction. In this case, there is a period of time between the settlement date (on the day on which the transaction is executed) and the day the transaction is concluded of at least 3

working days. However, the time span can also extend over several months. Both parties to the contract must meet the conditions agreed on the day of the transaction (which includes the exchange rate valid on that day), regardless of how the current exchange rate situation has changed.

The forward exchange transaction is thus one of the hedging transactions or exchange rate hedging transactions.

Spot exchange business

In the case of a spot exchange transaction (also referred to here as spot transactions), there is a maximum period of 2 bank working days between the day on which the transaction is concluded and the day on which the claim is fulfilled.

The currency swap transaction

A foreign exchange swap (also known as a swap in short, derived from English to swap exchange) is a combination of a spot and forward foreign exchange sale or vice versa. Here the currency exchange of 2 currencies on the day,

on which the transaction is concluded. However, the redemption action will be carried out at a later date. As this is a combination with a forward exchange transaction, the swap solutions also fall under a currency hedging transaction.

The currency option business

A currency option transaction gives the buyer the right to deliver or purchase a currency at a specified rate and on a precise date within a specified period of time. So that then the buyer receives the option of this right, the seller receives a price from him (the so-called option premium). The seller then has the obligation to provide or receive the currency.

How foreign exchange trading works

Two currencies have a certain value relationship to each other. One of them is the reference currency with a certain value and the other currency is set in relation to it, depending on its value. The corresponding values change in relation to each other. Also in the foreign exchange market a change takes place through supply and demand. If the one currency is in strong demand, it increases in value. If however the supply exceeds the demand, also at the foreign exchange market the value of this currency gives way opposite the other currency.

An important indicator of how the exchange rate of the currency changes is the key interest rate of the respective country. The higher a country's key interest rate is, the more capital flows into the respective currency and the more the currency appreciates. A change in the key interest rate not only has serious effects on the foreign exchange market, but also on the stock and commodity markets.

It is therefore important to suspend activities on the foreign exchange market before making a key interest rate decision for the most important currencies or, in the case of ongoing campaigns, to combine this with hedging.

As with all legal transactions, foreign exchange trading transactions are based on both performance and consideration. Here, for example, dollars are exchanged for euros or dollars for yen.

Here the exchange rates in the so-called currency pairs (also called price quotation) are given. Then the source currency (for example, exchange from dollar to euro, here dollars) becomes the base currency and the target currency (the euro) becomes the quote currency.

In addition to the pure exchange ratio, there is also a note of the codes (the so-called ISO 4217 code) of the respective currencies - i.e. source and target currency. This is done either with a separating symbol or with a slash or a dot. The exchange rate is often indicated with 5 significant digits.

Example: display 1 () 2345/B.Q)

Here, for an equal amount of base currency, you get more from the target currency when the exchange rate increases. If the exchange rate goes down, the reverse is true.

Foreign exchange business with private customers

One of the most common foreign exchange transactions for private customers is the transfer of money abroad to a country that has a foreign currency. There is also the occasional need to hedge larger foreign currency debts.

This may be the case if, for example, the maintenance of a vacation home located in a country with a foreign currency has to be paid and this has to be handled by a local bank in foreign currency.

Foreign exchange business also plays a role for private customers in securities settlement in foreign currencies. For example, if these generate income in foreign currencies and are then repaid in foreign currency. Here then the bank or the credit institute executes the appropriate foreign exchange. This also applies to foreign currency checks. Certificates can also be linked to the development of exchange rates.

However, foreign exchange transactions are carried out by those private investors who do so in the form of forex trading. However, there is no direct access to interbank trading and currency futures for the retail investor, as the volumes traded there are simply too large. This is where the so-called "Forex brokers" come into play, who then also give the private investor access to the foreign exchange market.

The most frequently traded currencies and currency pairs in the foreign exchange market

The most widely used reserve currencies internationally, such as the US dollar, Japanese yen, euro and the British pound, as well as the currency in the regional area, the Australian dollar or the Canadian dollar (commodities), are the currencies that make up the largest share of daily trading.

In terms of currency pairs, the EUR/USD pair has the highest trading volume with about 28 percent of all trades. In second place is the USD/JPY currency pair with about 14 percent and in third place is the GBP/USD currency pair with about 9 percent.

In practice, the major currency pairs are also called "majors". If there is no US dollar included as a part of the currency pair, they are called "crosses".

The exotic currencies (also called exotic currencies or "exotics" for short) are currencies that are traded relatively little and the liquidity available there is very low. Such currencies are sometimes not always sufficiently available for transactions. Such exotic currencies can be convertible (for example, the Mexican peso) or non-convertible (such as the Brazilian real). This also results in a relatively low trading volume for exotic currency pairs.

Such exotic currencies often come from economically and politically unstable developing countries. These include the South African rand (ZAR), the Mexican peso (MXN), the Chinese yuan (CNY), the Indian rupee (INR), the Hong Kong dollar and the Brazilian real (BRL).

Trading in these exotic currencies is also subject to much higher fees.

Market supervision in the foreign exchange or currency market

There is no supraregional or global supervisory institution for foreign exchange and currency markets. However, some market participants are supervised at the national level. If the market participants are banks or credit institutions, they are subject to the respective banking supervision of the respective country.

As far as Germany is concerned, foreign exchange trading is a banking transaction requiring a license. The legal basis for this is §1 paragraph 1 No. 4 KW (German Banking Act). According to this legal regulation, a banking transaction is considered to be "the sale as well as the acquisition of financial instruments in one's own name for the account of a third party".

In accordance with Section 1 (11) of the German Banking Act (KWG), financial instruments (including money market instruments, securities, foreign exchange or units of account and derivatives) are defined precisely here.

Similarly, proprietary trading of foreign exchange is also a financial service requiring a license (see § 1 (1a) No. 4 KWG). Proprietary trading (according to §

32 para. 1a sentence 1 KWG) is not directly subject to permission.

Compliance with the legal regulations (such as the minimum requirements for risk management -BA- in Germany, for example, which sets out the organizational structure for foreign exchange trading by banks and credit institutions) is monitored by the respective banking supervisory authorities.

Banks and credit institutions are also subject to regulatory reporting obligations based on the inventory risks of foreign exchange in accordance with the SolvV (Solvabilitäsverordnung - this is a legal regulation issued by the Federal Ministry of Finance in 2006 as part of the banking supervisory law). This regulation regulates the requirements for banks and credit institutions on the basis of Sections 10 ff of the German Banking Act (Kreditwesengesetz) in terms of capital adequacy (solvency) and liquidity.

The unclosed foreign exchange positions (uncovered or closed out positions) of banks and credit institutions are subject to a commitment to the available own funds of the bank or credit institution in accordance with sections 294 et seq. of the above-mentioned SolvV. If the total outstanding items account for 2 percent of the own funds, they are weighted at 8 percent. This then results in an automatic limit on the risky open overall positions in foreign exchange trading.

How do profits arise in foreign exchange trading?

For laymen or beginners it sounds a little strange at first that you can make a lot of money by changing just a few or just one cent from one currency to the other. In foreign exchange trading, not only, as normal, from the 2nd decimal place is assumed here, but from the 4th place. This 4th place is then also in the technical language in forex trading as "pip". A 5th decimal place again makes a finer scaling possibility in the strategy and the 5th decimal place is called "pip".

Thus, an increase in the EUR/USD exchange rate from 1.1759 to 1.1760

the change of 1 pip and this results in either a profit or a loss of approximately 8.50 Euro for a position size of 1 lot (trading unit in foreign exchange trading). Such an amount only works because of the leverage used in foreign exchange trading. Here it is then also possible, with a relatively small investment foreign exchange worth 100,000

Euro.

Example

The EUR/USD pair is showing greater resistance at the 1.15 level. This is where a sell limit order (such an order is used in Forex trading to sell a certain number of forex or securities at a fixed price or above. Each limit order has a precisely defined validity period) can be set with a standard lot (for example 100,000 units).

If the EUR/USD exchange rate drops only 2 cents to 1.13 and then the sell limit order is set at this level, and thus the position is closed out when this price level is reached, this trade will result in 200 pips and thus a profit of 2,000 Euro (for a position size of 1 lot, one pip is worth about 10 Euro). Therefore only very small

This is done either to make a larger profit if the estimate is correct or to make a larger loss if the estimate is incorrect.

Due to the leverage effect mentioned above, it is possible to trade with a small and manageable amount of money. For example, it is possible to trade an amount of 10,000 Euro with a leverage of 1 : 100 with a stake of 100 Euro.

As already mentioned, the size of a position in foreign exchange trading is measured in lots. A complete lot corresponds to 100,000 units of one currency. For example, if a whole lot in the EUR/USD currency pair

is opened, the movement of the price by 1 pip is enough to increase or decrease the result by 10 euros. Thus, a small bet would have the risk that this bet would be wiped out in a short period of time when working with such large positions as with a complete lot.

Therefore there are different lot sizes, such as 1 Minilot (corresponds to 1 Euro or USD per pip) or a Microlot (0.10 Euro or USD per pip).

Is the foreign exchange market liquid and is there so much movement in the exchange rates so that you can make money with it?

The foreign exchange market is very liquid and the foreign exchange moves sufficiently to make money even with small movements. But also because of the sometimes very long and pronounced trend phases, currencies are also popular with hedge funds. Thanks to the possibility of using leverage in forex trading, only very small changes in currency pairs are sufficient here (so only very few pips of movement) to make a good and reasonable profit. It is important to use good money management.

Foreign exchange trading is therefore not riskier than trading in other financial instruments, such as shares. Due to the fact that there is a clean technical market, it is easy to trade here. The foreign exchange market also offers a corresponding leverage, which is not available in other markets

The historical development of foreign exchange trading

The first beginnings of currency trading go back to ancient Greece. There, traders from the surrounding Europe and the Middle East met to exchange various currencies among themselves. In the port city of Piraeus, for example, the money changers of the time exchanged the coins of different countries and cities by comparing their gold ratio to their weight. It was also possible at that time to exchange raw materials, such as silver or gold, for a corresponding amount of coins (i.e. money).

In the 16th century, the then powerful Florentine Medici family produced a book in the shape of a nostro account. Among other things, it contained a corresponding list of local and foreign currencies and their exchange values.

In 1880 the actual international foreign exchange trading began. At that time it was possible for the first time that foreign payments could be received in a bank account abroad that belonged to one, in the form of a credit there.

The establishment of the International Monetary Fund (IMF) and the World Bank has resulted in fixed exchange rates. The Bretton Woods Agreement (July 22, 1944) also contributed to this. The fluctuation margins of this agreement were then internationally established. At that time, the central banks were also obliged to intervene in the markets if the so-called intervention points for the respective currencies were not reached or exceeded, in order to restore the current situation.

In September 1969 these fixed exchange rates were then relaxed and in March 1973 the European Community (EC) started block floating. Block floating means that the monetary authorities of at least two, but often more countries, undertake to keep the central rates of their currencies stable in relation to each other or within a certain range with corresponding intervention points. However, the exchange rates of their currencies vis-à-vis third countries fluctuate freely against the US dollar. As a result, the previously fixed exchange rates were replaced by freely fluctuating exchange rates. The floating exchange rates increased the risks of the market participants. As a result, the interest rate, stock and foreign exchange markets experienced greater exchange rate fluctuations.

Particularly in times of crisis, there have been strong fluctuations in the past century (as an example, the 1973 Yom Kippur War and the resulting oil crisis). In 1982, Mexico also closed its foreign exchange market, which led to the debt crisis in developing countries and Latin America. Further crises (such as the Tiger State Crisis in 1997) followed and this caused strong fluctuations on the foreign exchange markets. Thus, these few examples show that the foreign exchange markets, unlike the money and securities markets, are strongly influenced by government policies and thus a currency affected by this is in crisis. For this reason, it is now possible for a country's central bank or an association of states (such as the EU with the ECB - European Central Bank) to intervene directly in the events.

In the last century until the 80s, all foreign exchange transactions were handled over the telephone. This meant that the person trading in foreign exchange was able to follow the ups and downs of the currencies in real time over the telephone, in order to be able to react directly.

With the introduction of the PC in the 80's of the last century the possibility was then created for the dealers also to conclude a fast trade over the Internet. This procedure then became more and more accepted.

The requirements for foreign exchange trading

With the introduction of computers and ever faster Internet connections, foreign exchange trading became easier and faster. Especially in recent years, the foreign exchange or Forex market has become more and more popular among private investors. An on-line foreign exchange trade is possible up-to-date for each investor without larger problems. This would not have been conceivable only a few years ago.

Minimum age for online trading of foreign exchange

If someone wants to participate in foreign exchange trading online, they should be at least 18 years old. There are also some providers where the minimum participation age is 21 years. This is related to the respective laws, which are valid here at the respective countries where the corresponding online platform is registered and operates. However, interested persons can use the period up to the age of 18 to prepare for this market. Then the start from the age of 18 is much easier.

The capital required for this

Without capital investment, participation in foreign exchange trading is not possible. It makes sense that 1,000 euros are available here. There are also on-line platforms, with which a higher minimum capital, than 1,000 euro is presupposed. Here each person should be clear about it to start with a sum in the height, whose loss is also bearable for it. There are also online platforms for newcomers, where a minimum capital of 50 or 100 US dollars is required in order to gain initial trading experience.

Forex trading basic knowledge

Without a basic knowledge, foreign exchange trading should not be started. Such a behavior would be grossly negligent on the one hand, and on the other hand this person would most likely lose his initial capital completely in a very short time. Here, every beginner or novice should take enough time to learn this topic properly. It is also important that the beginner or novice person is also able to use the Forex software correctly.

To get started, it makes sense to read a textbook on the subject of "foreign exchange market". It is also an advantage to look at relevant forums on the Internet. Then it is possible to learn from the questions and possible mistakes of other forum participants, in order to be able to start then more successfully. Likewise, many online platforms offer the possibility to try out the acquired basic knowledge on the demo account available there, until you work with real money.

The equipment of a technical nature

Using a normal computer, you can participate in online forex trading. Even not so expensive devices already have sufficient speed. It is also of great importance that a fast Internet connection is available. Here a fast UMTS or DSL connection is very helpful. With the use of a modem the necessary speed cannot be achieved, since on the online platforms courses are exchanged continuously in real time.

The Forex Trading Software

Depending on the online platform, the trades are either executed in the web browser or this is done by software that then makes the online platform available.

If the software runs in a web browser, the online platform (i.e. the broker) recommends a compatible browser (either Chrome, Firefox or Internet Explorer). However, if the beginner surfs the web with an exotic browser, it can be assumed that this browser does not support foreign exchange trading. When it comes to browser execution, it is usually irrelevant whether the beginner or novice is using Max OS X, Windows or any other operating system.

If the online platform (i.e. the broker) works with a special software, which the beginner or novice then has to install on his computer, in the worst case, however, it can happen that this type of software only runs on a Windows system. If these people work with an Apple system, for example, it is not possible to work with this online platform (i.e. with this broker) or one has special computer knowledge and is then able to run Windows on OS X. Nevertheless, it makes sense to choose a platform (a broker) that will allow the system to run without problems.

The forex broker

The online platform or the Forex broker is a very important component to be able to participate in the Forex market and thus in foreign exchange trading at all. Without such a Forex broker, it is not possible to get access to the foreign exchange or Forex market, the largest market in the world. Therefore, one should take enough time to select the appropriate broker, to choose a reputable address, which is also then tailored to the appropriate person. After registration, trading can then begin after a few hours or days. Some of the brokers also provide a demo account, where the beginner or novice can familiarize himself with the platform without having to enter with his own real money.

The readiness for constant further training

Even if you then meet all the requirements to successfully register with an online platform (broker), you will not be able to earn guaranteed money. Here a constant readiness must be present to constantly educate oneself further and reading, thinking, learning and trying out must be a constant companion. It is also important, especially in this activity, to keep up to date with the latest news, as the events described there also have an influence on the exchange rate development and can therefore significantly affect the exchange rates of the individual currencies. Partly one is supplied with these news also by the broker or there are here also in the Internet appropriate sides in addition, which present such news.

The time commitment

Anyone who wants to deal seriously with this topic must plan time for this. Depending on how intensively one deals with this matter in terms of time, the amount of time required will also be reduced. For those who trade every day, several hours a day are needed and during this time hundreds of trades are sometimes executed. A hobby trader, however, tries his luck only from time to time, if he assumes that a favorable opportunity is available.

The advantages of foreign exchange trading

High liquidity in the foreign exchange market for the main currencies

The foreign exchange market is a very liquid market, as very large and extensive sales are made. There are Forex brokers, where trading is only possible from a volume of 100,000 euros. However, the liquidity must be somewhat limited by this, since this is primarily valid for the standard currencies, which are traded the most. These include, as already mentioned, the US dollar, the euro, the Swiss franc, the British pound and the Japanese yen. Trading in these major currencies accounts for approximately 80 percent of all forex market trading. For this reason, there is no need to fear that an order will not be executed because the market lacks the necessary liquidity.

However, the situation is somewhat different for the smaller currencies, which are then only traded to a lesser extent in terms of the number of orders. Therefore, the available liquidity in the main currencies is an advantage. In addition, in the case of small or exotic currencies, the situation can arise that an order cannot be executed due to a lack of liquidity.

Trading with foreign exchange is possible with a small investment due to the leverage

The amount of capital invested by the customer usually depends on 2 factors. These include on the one hand, the lever provided and on the other hand the lot requested by the broker.

Example for clarification:

The transaction consists of purchase US Dollar against Euro, the leverage 100 : 1; the minimum trade amount is one standard lot and the customer's capital investment is 1,000 Euro (100,000/100).

On the basis of this example, an investment of at least 1,000 euros is required from the customer, since the broker requires a minimum trading amount of 100,000 euros for the standard lot. Due to the given leverage of 100 : 1 this leads to the fact that a relatively high minimum capital investment of 1,000 Euro is required.

However, this is generally not a typical minimum stake for brokers. Many brokers require only a mini or micro lot instead of a standard lot. This means that a smaller amount (usually 20 or 50 euros) must be used for a higher leverage.

The ability to trade almost around the clock from home or on the road

Here, the customer can not only trade from home, but also on the road with the mobile devices. However, the prerequisite for this is that a functioning and well-established Internet connection is available. Today, terminal devices such as laptops, desktop PCs, tablets and smartphones are used for this purpose.

However, many traders appreciate the home PC for these activities. However, mobile trading is becoming more and more popular and is becoming more and more important, as customers on vacation or during a business trip also have access to the trading platform and foreign exchange trading.

The advantages also include the fact that trading is possible almost around the clock. This is due to the fact that the trading hours of the largest markets usually follow the other trading hours of another market. At 9.00 a.m. in the morning, for example, the European stock exchanges open. These are then followed by the US stock exchanges from 16.00 hrs. At 22.00 o'clock the US-American stock exchanges close and after approximately 1 hour difference already again the Asian and Australian currency stock exchanges open. This makes it possible to trade almost around the clock. Between late Friday and Sunday evening there is a compulsory break. Sometimes there are isolated brokers who offer Sunday trading.

Profits possible in a short time

To ensure that profits are possible in a short time, the leverage provided by the broker and the manageable capital investment ensure this. For example, with a capital investment of 100 euros, it is possible to trade a total amount of 40,000 euros with a leverage of 400:1. However, the positive price changes refer to the total trading volume and in the above case to the 40,000 Euro.

If, for example, the US dollar exchange rate rises by two percent against the euro on a single day, the profit would be 800 euros for a trading volume of 40,000 euros. However, this profit of 800 Euro does not have to be set in relation to the 40,000 Euro, but only to the actual capital investment of 100 Euro. In this example, a profit of 700 Euro would have been achieved for the customer on one day. On the other hand however also the risk is present that there are losses and thus the capital employment is then lost.

Free and exciting time management

There are a larger number of players in this market who have chosen to trade foreign exchange because it is also a very exciting and thrilling activity. Some market participants enjoy every second of the course of the exchange rates on the screen and this especially on the charts displayed there. It is partly also possible, on the basis of different diagrams with candlestick formations, to track the price development. It is also very exciting when it is possible to follow whether the exchange rate is developing in the desired direction and it is possible to make a profit of several hundred Euros within a few minutes.

The free allocation of time during such an activity is also an advantage. The market participant decides for himself at what time he wants to start trading or when he wants to observe the market. Also the already mentioned fact that one can act up to few breaks, almost around the clock, is likewise helpful for the free time allocation. Thus, both the early riser and the night worker, who wants to work only from 23.00 or 24.00 clock, comes at his expense.

Also, a trade can last for as little as a minute or over several days. As a rule, however, the market participants stay between half an hour and six hours. In addition, the settings on the screens are structured in such a way that a clear and quick control of losses or profits is available. This is then an additional advantage for the client.

Automatic trading possible

A part of the customers would like to be live thereby, in order to follow the course development here. On the other side there are however also customers, who have neither the time nor desire to always follow the market live. Also here the foreign exchange trade offers a solution. Here the automatic trade comes then into play. With the help of modern trading systems as well as the tools available for it, there is the possibility that the customer trades automatically according to his own specifications.

Trade within seconds

The trading systems are active in seconds and some of them have a reaction time that a human does not have. Also, some of these split-second trades take place completely independently, without the customer being directly on the screen. Likewise, emotions play no role in this type of foreign exchange trading. Also with the solutions within seconds the customers can automate their own trading strategy and use the indicators available in a variety of executions.

Possibility of making profits regardless of the direction of the market

The foreign exchange market is a pure price market. The prices can rise or fall. If the customer believes that the currency is about to become cheaper, there are hardly any restrictions on the sale. The profit potential in the foreign exchange market is independent of whether a customer buys or sells and is also independent of whether the market is falling or rising.

No major restrictions on access to market information

Despite some restrictions, individual dealers do not have any competitive constraints compared to professional dealers and analysts. The only advantage, in part, is that professional traders have a faster flow of information. However, the Forex market is a market where practically all participants have the same opportunity to access the information necessary for their activity. While in stock trading there is at least the danger that there are insiders at work who have access to internal company information and can then use it to their advantage. In this context, it is only important for a beginner or newcomer to obtain and evaluate the information and draw conclusions from it.

Success in the foreign exchange market depends on the customer himself

Before a beginner enters the foreign exchange market, it is important to determine what risk tolerance is present, what investment goals are pursued and in what form the beginner wants to acquire the knowledge to work successfully here. It is also important to limit the possible losses at all times and therefore stop-loss orders are also important in this area.

Low barriers to entry

In contrast to entering the futures, stock or option markets, entering the foreign exchange market is less cost-intensive. Some online brokers also offer "mini" or "micro" trading accounts, where you can get started with a deposit of less than 100 Euros. The minimum entry sizes in the other markets are here in a completely different much higher range.

No great influence by individual institutions

In the foreign exchange market, there is no danger that institutions or individuals will be given too much power. If, for example, a large shareholder in a joint-stock company sells his shares, this also has a negative effect on the share price. This is not possible in the foreign exchange market. For this, individual banks, central banks, governments, hedge funds or other institutions are not large enough to exert a corresponding price-determining influence. This also applies to economic experts or analysts. Even these cannot influence the foreign exchange market to such an extent that this would have a corresponding effect on exchange rates.

The disadvantages of foreign exchange trading

Especially beginners or newcomers should, however, the disadvantages that are also in foreign exchange trading and which can occur there, absolutely include in their considerations. The individual points will now be explained in more detail below.

Obligation to make additional contributions

One of the biggest and most serious disadvantages in the foreign exchange market (here it depends on the broker) is the so-called obligation to make additional contributions. Here it depends on the broker type. These can be divided into 2 groups. In one group there is no obligation to make a margin call, because open positions are automatically closed when the margin is reached. In the other group of CFD brokers it is regulated in such a way that there is a margin call. This makes it possible for the customer not only to lose the invested capital, but in the worst case to assume that he will have to add more money and this can then lead to financial ruin, because the obligation to make additional margin payments cannot be limited.

Especially in the case of a very unfavorable price development or a very fast price decline, it is possible that for example 500 Euros are used, but then due to the unlimited obligation to make additional contributions a few thousand Euros have to be paid into the trading account to compensate for the losses there. Although this example is extreme, it makes it clear that the existing obligation to make additional contributions represents a high risk in financial terms.

However, the risk arising here can be hedged by the possibility of setting a stop-loss order with a guaranteed stop. This ensures that although there is a theoretical obligation to make a margin call, this is not now applied or carried out in practice because the position is closed immediately when a certain price position is reached. Nevertheless, it is worth considering switching directly to a broker without a margin call, where this problem does not exist or such issues do not arise here.

Dubious and non-transparent brokers

Nowadays, most Forex brokers are regulated by the relevant supervisory authorities, so the number of dubious providers is very limited. Nevertheless, there are always rumors that one or the other broker would not work seriously. This then represents a risk for the customer.

In addition, there are also Forex brokers who do not want to actively cheat the client, but where this would put the client at a disadvantage, for example if the order execution is very slow. This also applies to slippage. Therefore, it is useful for a new or beginner to read the testimonials of other customers about the individual forex brokers on the Internet before opening a real money account there.

Also, there are some Forex brokers who are not very transparent to their clients and where the information on their website is also very unclear. There, for example, the risks are not described in detail. It can also happen that the customer does not receive exact information about the conditions under which trading takes place and what costs can occur. So that this disadvantage can be excluded, there are one or the other Forex broker comparison in the Internet, in order to decide there then for a respectable as well as regulated broker, with which also its conditions as well as conditions are represented transparency and cleanly readable.

The regulatory problem

The foreign exchange market is a decentralized marketplace. As a result, the market is not tied to one place and therefore there is no central regulation. This makes it a little difficult for a newcomer or beginner to find a real broker.

The solution is to implement regulation in the country where the broker is located. The authority is then responsible for supervising and licensing the broker. Brokers also use licensing as a customer capture argument in their marketing strategy.

This makes this information available to a beginner or novice. However, if it is an offshore broker that is not regulated in a country or area (for example, the European Union), obtaining information is sometimes not easy. Also, great care should be taken if the website contains inaccessible information in the direction of physical address or telephone number and thus there is a lack of transparency. Therefore, it is useful to compare several selected brokers and find out whether the service is also available and whether the company headquarters given is a physical address or a letterbox company.

Behavior of exchange rates

The exchange rates are sometimes relatively irrational, so that it is sometimes difficult to make a correct assessment of how the exchange rates will develop in the following days or weeks. Basically, the foreign exchange trade is very volatile and this is especially true when at least one currency from a currency pair to the smaller foreign currencies.

Economic and political developments also need to be monitored more closely, as the development of exchange rates also depends on them.

Beginners or novices sometimes react confusingly to the available market data. Especially if results occur there that were not expected and these data are then interpreted inaccurately or unrealistically, this can lead to major misjudgements. For this reason, it is of great importance, especially for beginners, to gain experience in the area of demo solutions, in order to then implement them correctly when the use of real money becomes serious.

Relatively extensive effort to acquire knowledge

The effort can be very extensive here. It also requires a lot of experience to be able to act correctly. For this reason, more extensive prior knowledge is also indispensable. Without the existence of a good basic knowledge should not act.

To do this, the trader must be able to evaluate the most important indicators for trading. He must also be able to read bar charts, line charts or candlestick charts.

Partly the acquisition of this knowledge is also connected with costs, which must also be considered.

Foreign exchange trading is very time-consuming

Due to the hours of presence on the screen, foreign exchange trading is very time-consuming, so that the exact course of the exchange rate can be kept in view and the best exit or entry opportunities are not missed. Likewise, a high volatility then also causes a great effort and a high level of stress for the person active there. If there is a low volatility, the course of the share price can lead to boredom.

If an order is set, you have to wait. Preparing a trade with a fixed strategy also takes a lot of time. Here the use of a trading software with alarm function is very helpful. This alarm function informs the person when the price has reached a certain position and when he should intervene.

Overconfidence

Many setbacks for the customers often come when they are convinced that they have developed a lucky hand for use in the foreign exchange market. For example, a participant in 4-5 trades continuously used a reasonable trade size, which in turn led to nice profits. Here then no self-overestimation situation may arise, but one must remain relatively modest also in such situations, because a self-overestimation often brings the customer in trading traps and then not or only with difficulty comes out again.

Such overestimation can also lead to trading with excessive leverage, or it can make you stick to losing trades because the client has already traded with such an approach several times. This in turn can lead to a dead end and it is better to stop such trades than to hold on to them for too long.

Avoidance of the gambling fallacy

If the customer has trouble taking losses, there is a risk of gambling fraud. This is a fallacy or tendency in which the trader or customer complains that he is entitled to a win in a trades by right because he has suffered a large number of losses. This way of thinking can then lead to a doubling of the stakes or to a too high leverage effect on a small capital base. The consequence of this could be a massive increase in losses, so that trading then becomes a kind of gambling.

Also for this reason a loss trade should not be doubled just because one has the feeling that a profit should finally come now. Instead, it makes more sense to continue working with a manageable amount of money until the security and the feeling for the market comes. Furthermore, the stake should only be increased if reasonable profits have already been made and the account has grown in the plus.

The risk of trading directly on the Internet

Internet-based trading systems are also exposed to risks in the event of software, hardware or Internet connection failures. An online broker can neither control the routing via the Internet nor the signal reception or the configuration of the receiving devices. The same applies to the Internet connection, which cannot be controlled by the online broker either.

In the worst case, this can lead to considerable delays, communication failures or distortions when trading takes place over the Internet. The fact that the online broker himself has a system failure has occurred only in the fewest cases. Here, broker companies have contingency plans and systems at partner companies to reduce such failures to a minimum. In an emergency, trading via telephone is also still possible.

Learn the forex basics

In order to start with Forex trading, it is important, as already mentioned, to first learn the basics. Otherwise no continuous passive income can be built up. This is also comparable with the traffic rules in car traffic. Here you do not simply drive without a driver's license.

The Forex Basics

Some terms have already been taken up in the introduction. Here they are presented in detail again.

What is a currency pair?

The most important currencies, which then also belong to the currency pair in the currency market:

-the US dollar (USD)

-the Euro (EUR)

-the British pound (GBP)

-the Swiss Franc (CHF)

-the Australian Dollar (AUD)

-the Canadian dollar (CAD)

-the New Zealand dollar (NZD)

-the Japanese YEN (JPY)

A currency pair is a comparison of two exchange rates. The first written value is the base value that exists and how much of the quote currency, i.e. the currency written in the place, you get for it.

If a currency pair EUR/USD with a value of 1.20 is specified here, for 1 Euro (Euro is the base currency) you will get a total of 1.20 US dollars (the value of the quote currency). Basically, the currency pair is always given in the quote currency. In this example, the value of the currency pair EUR/USD is given in USD.

The most frequently traded currency pairs are mainly linked to the US dollar. The clear number 1 is the EUR/USD currency pair. There is a technical term for each currency pair in Forex parlance. For EUR/USD it is the term EURO.

The most important currency pairs include EUR/USD (technical term EURO); GPB/USD (technical term Cable); USD/CHF (technical term Swissy); AUD/USD (technical term Aussie); USD/JPY (technical term Yen), USD/CAD (technical term Loonie) and NZD/USD (Kiwi).

What is a currency cross?

A currency cross is a currency pair consisting of the most important currencies, but not including the US dollar. Although these currency pairs are not used as often in Forex trading as if the US dollar were included as a component, they also play an important role in the foreign exchange or currency market.

What is a pip?

The "pip" is the smallest unit in Forex trading. By default, each currency pair is specified with 4 decimal places (example EUR/USD 1.1234). The 4th decimal place is called the "pip". If the rate of EUR/USD has risen from 1.1234 to EUR/USD 1.244, then the rate has increased by 10 pips.

There is one exception to this rule, namely the Japanese YEN. Here the pip is already at the 2nd decimal place.

What is a solder?

A lot is a standardized unit of measure in Forex trading. A lot is equal to 100,000 units of a base currency. For example, if a lot is traded from the EUR/UDS currency pair, then one pip (4th decimal place) has a value of 10 USD (100,000 x 0.0001 (1 pip) = 10 USD). To avoid having to use 100,000 units of a base currency in Forex trading, brokers offer different lot units.

This includes, among other things:

One lot corresponds to 100,000 units

Mini Lot corresponds to 10,000 units;

Micro solder corresponds to 1,000 units;

Nano solder corresponds to 100 units.

With the help of this division, smaller quantities can also be moved in Forex trading. In this case, the price changes have a much smaller effect on the invested capital. For beginners or novices it is recommended to trade with a smaller lot size.

What is meant by majors and minors?

The most important currencies are summarized under Majors, which are also described above. Minors are those currencies which are not traded at the same frequency or to the same extent as majors. These include the Mexican Peso (MXN); the Russian Rouble (RBL) or the South African Rand (ZAR).

Beginners or novices in Forex trading should start by focusing on the majors. The currency rates of the minors are subject to greater fluctuations and are something for advanced people or experts.

The Forex Broker

A Forex broker is the trading platform for the traders. Forex broker is a service company that places trades on the interbank market. The Forex broker finds a counterpart for the trade to be made by the trader because each trade can only be made if there is someone on the opposite side. Also, the Forex broker is, among other things, the contact person for the trade for questions or advice on the trader's possible Forex strategy.

The main source of income of Forex brokers is the so-called spread. Here the Forex brokers earn money with every transaction or trade. Forex brokers are required to pay a difference (the difference between the buy and sell price) for each trade. These spreads are sometimes called the bid/ask spread. The smaller this difference (spread) is, the better it is for the trader, because it means lower costs for the trade. Some of these spreads are variable to compensate for fluctuations in demand.

A good Forex broker supports the traders in every aspect of their activities on the platform. A demo account is made available to beginners or newcomers so that they can learn to trade with "play money" (i.e. no real money). This makes it possible for newcomers or beginners to develop a feeling for trading with foreign exchange. Likewise, different approaches can then be tried out.

A good Forex broker also explains to beginners the possible trading strategies without which successful trading would not be possible. Likewise, a good Forex broker is always available for his clients and deals individually with their problems and answers their questions in detail.

What does margin mean in Forex trading?

If traders were always winning, no margin would be required. Of course, this is also where losses arise. The Forex broker wants to protect himself for these cases and demands the so-called margin from his customers or traders. The margin is usually about 1 percent of the stake.

If prices fall now and losses are incurred, the Forex broker has a hedge through the margin. Margin thus represents a deposit on the account, which is available for hedging against a possible price loss. The trade called by the trader is then maintained until the account on which margin is posted is zero or the trade is terminated by the trader. If the margin is zero, there is a margin call. This means that the trader has the obligation to deposit the same amount again to cover further losses. This is obligatory for every customer or trader, because he did not end the trade manually in time or set a so-called stop loss.

Leverage in Forex Trading

Leverage transactions in Forex trading are understood to be those transactions in which high profits can be achieved with a low equity investment. This is due to the fact that the broker, for example, offers a leverage of 200 : 1.

A leverage of 200 : 1 means that a total of 200 units (100 x 200 = 20,000) of a set unit (for example 100 US dollars) are circulated. In a figurative sense, 199 units are borrowed from the broker. The more units are traded, the higher the profits will be. This means that the greater the leverage, the higher the possible price gains. This also creates a special incentive for the traders. Even with small price fluctuations, high profits can be achieved. That is then very tempting.

On the other hand, however, large losses can quickly occur during lever operations. Therefore, it is useful for beginners and novices to work with small levers first to get a feeling for the behavior of the lever.

What is a stop loss?

A stop-loss is the limit below which a loss can no longer fall. When the exchange rate reaches the set limit, the trade is automatically terminated. This serves to avoid uncalculated losses. Such a function can also be used to set a maximum profit in advance. In this case, the Take Profit function closes the trade at a price set by the customer or trader.

The stop-loss function is one of the most effective ways for the trader or client to protect themselves from unexpected price losses. It is nothing other than a sell order when a certain position is reached, which is then triggered when a certain price is reached.

Frequently, behind a strong currency loss there are also clear fundamentally justified facts for this rapid and sudden decline, which can also partly be the beginning of a long downtrend. The customer or trader cannot easily recognize what kind of price decline it is and therefore he plays it safe with a stop-loss order.

Forex trading and emotions

Whoever does Forex trading should not let any emotions get involved. The reason is that the actions of people are influenced by emotions and often reason is pushed into the background. Thus short circuit reactions can develop, which can lead straight with Forex Trading to the loss of larger or large quantities of money.

Actions of people: If the customer or trader has made disproportionate profits, there is a risk that he will be rashly tempted to make large investments. This can then lead to uncontrollable losses on the next trade. Therefore, emotions should not come into play in Forex trading.

Choosing the right Forex broker

Choosing the right Forex broker is one of the most important factors for success in foreign exchange trading. Therefore this book dedicates a completely separate chapter to this topic again. For it decisive are among other things the correct commercial offer, the seriosity as well as the security of the broker, the fee height and the customer service.

Open a Forex demo account

Once the Forex basics are internalized and the right Forex broker is found, the next step after registration is to open a demo account.

With the help of such a demo account newcomers as well as beginners can get acquainted with the program of the Forex broker and learn how to trade Forex without using real money and thus without risk. Not every Forex broker offers such a demo account for free and unlimited. Therefore it is important to choose the right Forex broker.

It is also possible with the demo account to test different Forex strategies and thus choose the right strategy without risk. Even if you are an advanced Forex professional, a demo account allows you to try new strategies without having to use real money.

Thus, a demo account is always helpful to try out new procedures that will be applied to the real account later on, when they work. The "Forex broker" section of the website also contains detailed comments on the "demo account" topic.

Find the right Forex strategy

Another important point is that every customer or trader must find the right strategy for himself. Forex brokers, programs, textbooks about forex or even magazines from this field can be helpful in finding the right strategy. But each client or trader can only find out for himself which strategy suits him and his style.

Once a beginner or novice has found his strategy, he usually sticks with it.

Here however also with many customers or traders the danger exists that they get a bad gut feeling after the first losses and therefore change the strategies and intervene partly also in current trades and thereby inconsiderate reactions arise.

But feelings are not yet a trading strategy and are out of place in Forex trading, because a strategy was also chosen for statistical and evaluable reasons and therefore you should trust it even if you lose.

As mentioned above, a demo account is also used to test and refine the strategy. Also, real money should only be traded when the client or trader is sure that the chosen strategy is good and reasonable.

Since the selection of the correct strategies is crucial for the further behavior for the customer or Trader, here its own capital is dedicated to this topic.

Hands off currency exotics

Newcomers or beginners in the field of Forex trading should not use exotic currency pairs at the beginning of their activity. Especially with this type of currency pairs, there can be large fluctuations and also here the spreads are usually very high. Such currency pairs are better kept with professional traders.

Newcomers should focus on the majors (the main currency pairs) first. These trades with such currency pairs point to

Split lower spreads. They are also not subject to the strong fluctuations, as is the case with exotic currency pairs.

Thus, any beginner or newcomer to the foreign exchange market should start with the majors (major currency pairs).

Documentation and analysis

In order for trading to be successful for the client or trader, documentation and analysis of the trades executed are very important. Every single trader should be documented and analyzed in detail in order to determine why he was successful or not. For each trade that has been concluded, a corresponding list of questions should be determined and then answered.

The questions that belong here could be among others:

- What Forex signals caused the trader to make the trade at the time of the conversion?

- Has the original implementation plan changed during the course of the trade?

- Why was the plan changed?

- Which procedure is implemented in the same way for the next trade?

- What should be changed for the next trade?

- At what point in time could you have set a stop loss?

- Was the news from the currency market correctly interpreted and implemented?

Once a documentation and analysis system has been found, this system should be used for each trade. It does not matter whether the trade has made a profit or a loss. The analysis possibilities are also explained in detail.

Being always up to date with the latest news

The foreign exchange market is a very fast moving world. The exchange rates are controlled by many different influences and these influences lead to fast and short-term changes. Political news from a country also has a strong influence on the exchange rate of that country. Each statement of a leading politician of such a country is also put on the scales and can cause strong fluctuations in the exchange rates.

For this reason, it is always of great importance for every customer or trader to be up to date with the latest information. A large number of forex brokers provide the necessary information, which can be used as a forex signal.

Only those who as a trader or customer constantly follow the news world are able to react quickly to unexpected and expected news and to make appropriate changes when trading.

Exact daily planning and precise objectives

Likewise, in Forex trading nothing or not much is possible without a well thought-out plan. The more structured the client or trader works, the higher are his chances of success in Forex trading. However, it is of great importance that the plan is followed