1. How to use a demo account on Forex?
Demo account – is a virtual trading account. Trade on a demo account is the most suited way for beginners. It gives a possibility to get better acquainted with a trading terminal and learn how to open and close trading orders without worrying about any risk of losing real money. To register a demo account please contact your account manager to avoid mistakes.
Demo account without registration –is a very rare thing on the Forex market. Most typically, demonstration trading becomes available only after the registration on a broker’s web-site. It won’t take you too much time and all you will have to do is indicate your personal data, phone number and email address.
Demo account is a useful solution not only for beginners, but for professional traders who wish to test their new strategies at minimal risks for their funds. Forex demo account – is the best and free-of-charge option for any trader to get familiar with all the traps and pitfalls of the Forex market.
2. What are the most common mistakes of the beginners on Forex?
Whether you’re starting a new job or joining a new group of friends there is always an awkward “feeling it out” period. It’s no different than learning to trade. Beginners tend to get into the game without any idea of what they’re doing. A popular mistake newbies often do is trading without education. Getting a proper education on the factors that affect market movement, the trading strategies and the ways to mitigate your risk is the difference between a successful trader and a market failure. Beginners also often trade with emotion instead of logic. It’s important to trust the logic and system you were taught by your trading mentors. Also, traders with the lack of experience often think that losing is negative. Losing a trade doesn’t mean you’re a failure, it just means that the market didn’t behave as you thought it would. The truly successful traders are the ones that take the losses on the chin, and work hard to ensure that for every loss they have they make two wins.
3. What factors influence price fluctuations on Forex?
Many factors may press the price of an asset up or down. Inflation is a very important indicator, as it sends a signal of increasing price levels and falling purchasing power. Employment levels, retail sales, manufacturing indexes and capacity utilization also carry important information on the current and forecasted strength of an economy and its currency. They also influence the level of a price.
The Forex market is ultimately driven by economic factors that impact the value and strength of national currencies. The economic outlook for a country, whose currency you want to trade, is the most important determinant of the currency's value. Knowing the key factors and indicators influencing the currencies value will help you keep pace in the competitive and fast-moving world of Forex.
4. What currency pairs are the most volatile on Forex?
Technically speaking, volatility refers to the amount by which an asset price fluctuates over a time period. If you want to trade volatile currencies, step away from the major pairs. They are less often hit by rapid price changes. Only GBP/USD, USD/JPY and USD/CAD move for more than 100 points per day. EUR/USD turned out to be the least volatile currency pair.
As for the cross rates like GBP/NZD or GBP/AUD, they can move for more than 200 points per day on average.
The most volatile Forex pairs are exotic ones. These are, namely, USD/SEK, USD/BRL, and USD/DKK. All of them move for more than 400 points per day on average.
5. What is leverage and how to use it?
Leverage enables the traders to trade larger amounts of money by having a small amount of money in their accounts. Many traders would define leverage as a credit line that a broker gives to his client. This isn't exactly true, as leverage does not have the features that are issued together with credit. First of all, when you are trading with leverage you are not actually expected to pay any credit back. You are simply obliged to close your position or keep it open before it is closed by the margin call. In other words, there is no particular deadline for settling your leverage boost provided by the broker. Besides that, there is also no interest in leverage. To sum up, leverage in Forex trading is a tool that increases the size of the maximum position that can be opened by a trader.
6. What are the best methods of Forex trading analysis?
There are many different ways to analyze the Forex markets to make trades. One of the most popular analytical mechanisms is surely fundamental analysis. It is all about taking the current status of each country’s economy and trying to find currency pairs that are cheap or expensive. A trader who uses fundamentals will also rely heavily on news announcements to guide him with trading.
Trading with robots and expert advisers is very common with new traders. But all a Forex robot does is make trades by itself using certain criteria that has been inbuilt.
Trading with indicators is a very slippery slope that normally ends with confusion. Like trading robots indicators are very popular with newer traders. Indicators are what traders can place on their chart to help them in their decision process. Professional traders tend to stay away from indicators and concentrate on a simple method that focuses on price movement and key levels in the market.
Traders that use technical analysis are using price charts, price patterns and sometimes indicators to help them make trading decisions. Whilst traders using fundamental analysis are using news and economic reports to make trading decisions, technical traders are only interested in what is happening on the charts.
7. Answers about trading
How much does an average Forex trader make each month?
First, it depends on a trader himself. Most Forex traders have unreal expectations and believe that they can make up to 50% profit per month. This is almost impossible and on average successful traders make up to 10% monthly profit. And they are the experienced ones. You can surely make more than 25% a month. What is impossible, though, is to maintain 25% and higher profit every single month. It is the wrong approach and overwhelming goal mark, which will cause you to overtrade, use too much leverage, run after bad trades and ultimately lose your account funds.
Forex means foreign currency exchange and it basically deals with buying and selling different currencies simultaneously. Profits are based on the success of the trade. You make money in case you buy-low and sell high. You lose money when you buy-high and sell-low.
Forex profits also depend on the initial investment capital. If the initial deposit is just $5, it is most likely that you won’t collect anything larger than $10 per month.
Making consistent income working from home is not just a dream. Get serious about Forex trading, dedicate your time and mind to learning the basics, find a reputable broker, practice with demo accounts and build yourself a better life, because if you won’t nobody else will.