Thirteen exciting facts about Forex Trading

Thirteen exciting facts about Forex Trading

Interested in Forex Trading? Here are some facts you should know to trade better.

1. Forex is often referred to as Foreign Exchange.
Forex is a place where a pair of currencies are traded. Forex is derived from the word For= Foregin and
Ex= Exchange, thus Forex. It is also called FX.

2. Forex trading is one of the high-risk investments that require discipline.
FX trading requires a high degree of patience and discipline as it is one of the most high-risk
investments. Many times, the trader might be pressured due to market conditions that can lead to
mistakes while trading.

3. Trading in Forex is quite profitable.
Many traders make a quick profit; thus, one can be financially free and still make a lot of profit.
However, before traders can start reaping the fruits of FX trading, they have to undergo a lot of training
and understand the market dynamics.

4. You can gain an advantage by leveraging.
Leverage is generalled calculated on the proportion of invested funds to the trader's actual
equity/deposited funds.

5. Forex spread involves the difference between the BID and ASK or BUY and SELL.
The difference between the ASK price and the BID price is referred to as a spread. Brokers generally
increase the spread they get from their market providers as compensation for their service to the end
client rather than imposing a transaction charge.

6. There are different types of trading platforms like Metatrader available online.
Even though Metatrader platforms like MT4 and MT5 are pretty popular, many brokers go for the Web
trader platform, while some brokers have a platform that they can use on their terms.

7. Fundamental and technical analysis plays a vital role in forex market analysis.
Economic, social, and political factors that affect the price of a currency are analyzed under fundamental
analysis. In contrast, technical analysis involves the analysis of charts and the price and volume
movements.

8. There are unlimited indicators for FX Trading.
Although there are many indicators for FX trading, the most commonly used are the: Average True
Range (ATR) Indicator, Commodity Channel Index (CCI) Indicator, Bollinger Band Indicator, Envelopes
Indicator, and DeMarkers Indicator.

9. Financial instruments like Forex Trading, Binary Options, and Bitcoin considerably differ.
FX is a decentralized global market and is often refuted to Over-the-counter or OTC for currency trading.
A binary option is based on the prediction of the outcome of the market, if it will go up or down.

Bitcoin has been accepted as a digital currency since 2009 and involves many factors for its price
movement.

10. A Lot size is the minimum traded amount for each currency.
One lot is 100,000 units of the Base Currency for a regular account.

11. Calculation of profit and loss is based on pips in Forex.
Pips are referred to as points and are usually the last two digits behind the decimal of a currency quote.
These are used to compute profit and loss. These points are used to determine the difference between
purchasing and selling prices, also known as a spread.

12. Several different groups and individuals offer Forex a wide range of different signals.
Forex traders use systems to predict the market price movement. Traders globally rely on these systems
to make decisions and carry out the trade. So it's always a good idea to research the signals you're
considering using and use -profit and stop-loss configurations.

13. Understanding the market is important.
Profits are based on price movement. Therefore, understanding how the market works is very important
as it helps a trader minimize the loss and, at the same time, maximize the profit. Furthermore, since the
traders are trading in Forex, it would be helpful for them to understand a wide variety of the factors
happening globally, having an impact on the forex market.