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Forex Exchange: How to Earn

Want to learn how to trade stock Indices in world's top financial markets such as South Africa's JSE and Dow Jones like a pro, or find out what the most traded Indices are and why they're so popular? Here's how

To gain access to stock indices trading, you need to choose a reliable broker that will provide access to trading and a convenient platform (software) for online trading. Also, to earn money, you will need a “leverage” range from 100 to 2000 or more.

As a result, by depositing only $1,000 into your account with a leverage of 1 to 100, you will be able to operate with $100,000 during the transaction. By selling and buying different currencies, you can either earn or lose on the exchange rate difference.

At the same time, good platforms have a large number of automatic indicators for market analysis, both technical and graphical (up to fifty), which make it easier to navigate the ongoing process.

Forex Exchange Opening Hours

The Forex “exchange” has a strictly limited working time — any operations start at 2 am on Monday and end at 2 am on Saturday. It seems that this is quite a reasonable restriction for especially ardent players who could analyze the situation and sell or buy currency almost 24 hours a day. All this time, not only speculators and investors, but also banks, make profit or incur losses.

The work can also be limited by the popular Forex brokers themselves – dealing centers. By the way, at the moment the activities of such organisations in the Russian Federation are not subject to regulation and control.

‘Play’ on the Forex Exchange

To play in the Forex market, study the “introductory data” — account types, broker margin requirements, client documents. Accounts differ in terms of the minimum deposit (100 USD/EUR or more), available trading instruments (not only classic currency pairs, but also CFDs on metals, energies, indices and stocks.

Leverage varies depending on the broker (1 to 25 — 1 to 500) and many other parameters. By analysing the data and evaluating trends in a timely manner, it is possible both to acquire a growing currency (or other instrument) and to sell a declining one relative to others in time.

Forex Trading

Forex “stock” trading in the United States is regulated by the government’s Commodity Futures Trading Commission (CFTC). Bidding rules and conflict resolution are managed by a non-governmental association (National Futures Association).

Traders outside the US are trying to comply with the American NFA, as both private traders and funds avoid companies that do not meet the level set by the NFA.

And only in December 2014 the relevant law was adopted, which clarified the essence of the concept (as trading on an unorganised market), and made it possible to protect individuals from fraudsters by requiring the registration of a forex dealer in an SRO.

By analysing the data and evaluating trends in a timely manner, it is possible both to acquire a growing currency.

Forex Exchange for Beginners — Basics

The first thing that attracts the Forex exchange for beginners is that you can learn the basics of trading here. Before becoming a trader, it is important:

  • choose a suitable broker to carry out operations (he will provide both software and “shoulder”);
  • understand the terms, study the main methods of analysis (fundamental – by country, technical – for specific operations);
  • download software (terminal, most often Metatrader of the appropriate version);
  • try out the main types of operations in demo mode, and not on real money.

Experienced tips are as follows:

Trade not on a schedule, but when you have a balanced, thoughtful decision.

  • Do not read everything in a row – choose the most important from trusted sources.
  • Study trends, but don’t focus on them.
  • Think over scenarios of actions, do not rely on “sudden inspiration”. Know exactly when you will stop operations.

Nuances:

Currency pair — any two currencies, one of which rises or falls concerning the other.

  • The name encodes the direction of trades: base currency/quote currency. Base — bought/sold, quote currency — measures the ” rate ” value.
  • There are four major pairs: EUR/USD, USD/CHF (with Swiss Franc), GBP/USD, and USD/JPY (with Japanese yen). They are called Majors.
  • Up to 90% of transactions are made with the US dollar, 37% with — the euro, 20% — with the yen, and the British pound sterling — no more than 17% of all transactions.
  • Maximum activity (and change in quotes) occurs when the national banks of countries change rates. This time is called trading sessions.

Psychology of Work on the Forex Exchange

Before starting to take action, it is essential to understand the psychology of working on the Forex exchange. According to unofficial statistics, up to 95% of traders waste their funds without achieving any profit.

Funds go to the accounts of dealing centers. Detailed training, planning, work strategy, precise analysis, and pre-thought-out schemes of actions, making operations only with a complete understanding of the current process, are the main components of the psychology of working on Forex.

Punctuality and pedantry in implementing their decisions are the only salvation for “hot heads” and those prone to greed and thirst for a quick profit.

Note. Before working with any new currency, it is essential to conduct a fundamental analysis — to study the state of the country, current processes, and global trends so as not to focus on short-term “differences” in quotations.

Forex Operating Hours

The OTC Forex market generally operates 24 hours almost every day, except for a regulated weekly break.

However, many download applications or install software that shows specific periods — the opening and closing of trading sessions on world exchanges. During such Forex hours, transactions are maximum in volume, and the spread — the gap between “demand” (ask) and “offer” (bid) — is significant.

There are similar online services — they are less convenient because they do not offer alerts. At the same time, good “watches” must indicate the following:

  • current quotes;
  • support levels;
  • stock indices;
  • exchange rate of the Central Bank;
  • USD index.

The clock allows you to determine trading session opening and closing times in a specific hourly range.


*For the latest breaking financial news and trends on money matters in South Africa and around globe, visit our Money & Finance page regularly. 

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