Introduction

As it is commonly known, the currency market, or Forex (FX), is a market that makes it easy to buy and sell different currencies. Thanks to the interbank market, this operation is carried out in a decentralized manner (OTC).
Without knowing it, you most likely had already participated in the foreign exchange market, either when you ordered imported shoes, or more directly, by acquiring foreign currency when you were vacationing abroad. Investors are interested in Forex for several reasons, among which the following stand out.

The Size of the Forex Market

• Wide variety of currencies to be traded
• Different levels of volatility
• Low transaction costs
• Operational 24 hours, five days a week

Forex, a Speculative Market

One of the most common Tradings and investing philosophies is "buy low and sell high," Particularly long-term investments, such as investing in stocks or bonds, depending on the asset's value. In the Forex, you can also sell high and buy low. In this way, you can potentially make a profit on both downtrends and upward trends.

Forex, a Market with Low Costs

Beginning Forex traders and professionals can access large volumes of the Forex market with a low spread.

Also, additional costs are low. For example, most Forex trading accounts have limited (or no) commissions, order fees, and account administration fees.

Forex, an Easily Accessible Market

Forex's most significant advantage for beginning traders is that it is one of the most developed commercial markets in technology. While many markets can be accessed through the old trading platforms, there is constant competition in the software available to trade the forex market. Trading platforms offered by Admiral Markets include:

• MetaTrader 4 (MT4)
• MetaTrader 5 (MT5)
• MetaTrader WebTrader

Furthermore, Admiral Markets also provides traders with a MetaTrader plugin, known as MetaTrader Supreme Edition. With access to all this software, the Forex can be traded from anywhere globally, and all you need is an internet connection.

What is Forex Trading?

The foreign exchange market, as it is subject to supply and demand, works like most other financial markets. Using an elementary example, if there is a strong demand for US dollars from European citizens, they will exchange their euros for dollars. As a result, the advantage of the US dollar will go up while the value of the euro will go down. Note that this transaction only affects the EUR / USD pair and will not, for example, cause the USD to fluctuate against the Japanese yen.

What Moves the Forex Market?

The above example is just one of many factors that can move the forex market. Other factors include larger events such as the election of a new president, or country-specific economic determinants such as the standard interest rate, GDP, unemployment, inflation, and the debt-to-GDP ratio, to name a few… Most traders use an economic calendar to keep up with these and other relevant financial publications to move the market.

What Makes the Forex Market so Engaging?

The foreign commerce market allows large institutions, governments, retail traders, and other individuals to exchange one currency for another through the interbank market (between banks).
Trading's benefit among global currency banks is that FX trading can be operated 24 hours a day, five days a week. At the end of the Asian trading assembly, European and British banks connect before the United States enters into operation. The TheTrading'ss full-day ends when the US session leads to the Asian session in the next era.

According to the Bank for International Settlements, this market is even more engaging to dealers because it is by far the most excellent fluid market globally, with an expected daily trading volume of $ 5.1 trillion. This means that traders can quickly enter and exit positions, as many buyers and sellers are willing to trade currencies.

What is Currency Dealing, and how does it Operate?

Many people question how to make money trading Forex. Fortunately, the fundamentals behind currency trading are pretty straightforward. If you think the value of a coin will rise (appreciate), you buy the coin. This is identified as going" "long" Conversely, if you believe the currency continues to go down (depreciate), you exchange that currency. This is recognized as going" "short."

Platforms and Tools for Forex Trading

IQ Option Forex allows you to put Trading to the test without leaving your home.
Our broker works as a facilitator so that our registered users take part in this market between banks. Apart from this, IQ Option clients can try many other trading variants.

Each user can choose from more than 80 assets provided by the modern IQ Option platform.
Although we have this surprising figure, the broker's developers continually work to increase this amount. As a result, it is possible to select market indices, products or commodities, stocks, various currencies, etc.

Thanks to a great diversity of assets, every trader can choose those that suit their best according to their financial level, experience level, and personal preferences. Furthermore, being a customer-oriented service guarantees our users the most comfortable way to operate, thus generating a satisfactory trading experience reflected in a significant monetary value.
The major currency pairs are made up of the currencies that are most frequently traded, which are:

• USD — The US dollar
• EUR — The Euro
• JPY — The Japanese yen
• GBP — The British Pound
• CHF — The Swiss franc
• CAD — The Canadian Dollar
• AUD — The Australian Dollar
• NZD — The New Zealand Dollar

A significant currency pair contains any of these currencies paired next to the US dollar, before-mentioned USDJPY, GBPUSD, or EURUSD. In addition, there are also couples made up of these major currencies that do not involve the US dollar. These combinations incorporate:

• EURGBP
• EURCHF
• AUDNZD and so on.

Indeed, exotic currencies are any currencies that we have not mentioned before, such as:

• The Hong Kong Dollar (HKD)
• The Norwegian Krone (NOK)
• The South African Rand (ZAR)
• Thai Baht (THB)

Exotic Pairs Include an Unknown Currency and a significant Currency.

Many beginners tend to focus on the major currency pairs when learning to trade Forex due to their daily volatility and tight spreads. Nevertheless, other possibilities are abundant, from exotic currency pairs to CFD trading opportunities on stocks, commodities, cones, and indices.

The number of markets you invest in is solely up to you. However, we advise you not to focus on a single call or instrument. Restricting the market can lead to overvaluation, so be assured to diversify your investment.

Diversify your Portfolio

We all recognize the motto "don't put all your eggs in one basket"; however, many newcomers Forex traders do this when trading.

In the same way that it is not advisable to put all your funds in a single transaction, relying on a single currency pair increases your level of risk. If the couple moves in a different direction than you expect, you could lose everything.

Instead, we advise you to open a series of small trades in different Forex pairs.
You might even consider trading other CFD instruments, such as stocks, symbols, materials, cryptocurrencies, and more, as these will further expand your trading portfolio.

Using leverage wisely

As we have already mentioned, Forex CFDs allow you to trade on margin or support.
Nevertheless, just because 1:30 (or 1: 500) support does not, it doesn't mean you should use it. At Admiral Markets, and as directed by the ESMA, the levels of influence are determined by the client's classification as retail or professional.

Focus on the Long Term

The initial objective of your Trading should be to preserve your capital, not to try to grow. Therefore, minimizing risk is the main objective.

One way of achieving this is possible by using a long-term trading position. Unfortunately, forex trading beginners often overlook that the most successful traders try to return on their investment based on long-term trends.

They often keep their orders open for weeks, months, and even years. In this way, Forex works as an investment rather than a lottery.

Use a Stop Loss

The stop loss is tool traders use to limit their possible failures. In short, it is the price level at which a trade that is not moving in your favor will close, and this will prevent additional losses as the market continues to advance in that direction.

You can likewise use a stop loss to keep the profits you have already made. The tool to accomplish this is known as Trailing Stop Loss. Again, this tool follows the direction of the market.

• Margin call: When the deposited capital, less any losses, falls below a specified level (minimum margin).
• Liquidity: A currency pair is considered liquid if it can be easily bought and sold because many participants trade that currency pair.

If you have been researching forex trading before, you may have seen the term "Forex CFD" at some point.

There are two methods to trade Forex: using CFDs or spot Forex.

Forex Spot

It suggests buying and selling real currency. For example, you can purchase a particular volume of pounds sterling and exchange it for euros. Once the pound's value develops, you can exchange your euros for pounds again, receiving more money from what you formerly spent on the investment.

CFDs

CFD attains for "Contract for Difference," It is a contract used to represent the movement in financial instruments" prices. In Forex terms, this means that alternatively of buying and seng large amounts of currencies, you alternatively without keeping the asset itself. Along with Forex, CFDs are also accessible on stocks, indices, bonds, commodities, and cryptocurrencies. In all cases, lt allows you to trade these instruments" price movements without purchasing them.

If you are interested in this instrumentsding how CFDs work in greater detail, we recommend the following article: What is CFD Trading.

Key Terminology for learning Forex

Before proceeding, let's recap the key concepts needed to learn Forex trading if you are a newcomer:

Pip

A pip is the corner unit in the value of currency pairs or 0.0001 of the valued amount. So when the bid value for the EUR / USD pair goes from 1.16667 to 1.16677, that represents a change of 1 pip.

Spread

The spread is the difference between the buy price and the selling price of a currency pair. The spread is often low for the most popular currency pairs, sometimes even less than a pip!
For pairs that are not traded as frequently, the spread tends to be much higher. Before a Forex trade grows profitable, the currency pair's value must exceed the spread.

Margin

Margin is the money held in the trading account when beginning a trade. However, because the average" "Retail Forex Trade" requires the specified margin to trade high enough volume to make a great value, many Forex brokers submit their client's entrance to leverage.

Leverage

This theory is a must for beginner Forex traders. Leverage is the resources provided by a Forex broker to increase the trading volume of its clients.
The quality of the trading tools that a Forex broker offers can make a big difference to your trading experience. Of course, the tools available will depend on the trading platform (or platforms) you use in most cases.

For example, Admiral Markets offers Trading through the state-of-the-art MetaTrader Supreme Edition 4 and 5 plugin, including custom tools and add-ons to enhance your trading experience.

Risk Management Tools and Techniques for Forex Beginners

Once you have mastered Trading and moneymanagement'ss psychology, many trading techniques can be applied to reduce your risk further:

Diversify your Portfolio

We all know the motto "don't put all your eggs in one basket"; however, many beginning Forex traders do this when trading.

In the same way that it is not advisable to put all your funds in a single transaction, relying on a single currency pair increases your level of risk. If the couple moves in a different direction than you expect, you could lose everything.

Instead, we advise you to open a series of small trades in different Forex pairs.
You might even consider trading other CFD instruments, such as stocks, indices, products, cryptocurrencies, and more, as these will moreover diversify your trading portfolio.

Use Leverage wisely

As we have already mentioned, Forex CFDs allow you to trade on margin or through the use of leverage.

Nevertheless, just because 1:30 (or 1: 500) leverage is convenient, it does not mean you should use it. For example, at Admiral Markets, and as directed by the ESMA, the levels of influence are determined by the client's classification as retail or professional.

Focus on the Long Term

The initial objective of your Trading should be to preserve your capital, not to try to grow. Therefore, minimizing risk is the main objective.

One way of achieving this is possible by using a long-term trading position. Unfortunately, forex trading beginners often overlook that the most successful traders try to return on their expenditure based on long-term trends.

They often keep their orders open for weeks, months, and even years. In this way, Forex works as an investment rather than a lottery.

Use a Stop Loss

The stop loss is tool traders use to limit their possible failures. In short, it is the price level at which a trade that is not moving in your favor will close, and this will prevent further losses as the market proceeds to move in that way.

You can also make a stop loss to keep the profits you have already made. The tool to accomplish this is known as Trailing Stop Loss. This tool follows the direction of the market.

Price Quote

When you trade Forex, you will see the'‘As" and'‘Bi" prices are quoted:
The asking cost is the price at which you can buy the currency, and the bid estimate is the amount at which you can sell it.
One of the points you should keep in mind when you want to learn Forex from scratch is that you can trade both long and short, but you have to be aware of the risks involved as it is a complex product.

Short Operation

You sell a currency with the expectation that its value will decrease, and you can buy at a lower discount, benefiting from the difference.

Long Operation

Buying a currency expects its value to increase and profit on the difference between the buy and sell price.

The rate at which currency pairs are quoted is based on the current exchange rate of the currencies in the couple, or the amount of the second currency that you would get in commerce for one unit of the first currency (for example, if you could exchange 1 EUR for $ 1.68, the buy and sell price would be on either side of this number.)

If brokers make a profit by charging the difference between the buy and sell prices of currency pairs, the spread, the next logical question is:

How much can a given Currency be expected to go?

This depends on whereby liquid the currency is or how much is bought and sold simultaneously. The most liquid currency pairs have the highest supply and demand in the Forex market, and the banks, companies, importers, exporters, and traders generate this supply and demand.

Major currency pairs tend to be the most liquid, with the EUR / USD currency pair moving 90–120 pips on an average day and implements the most short-term trading possibilities.
In diversity, the AUD / NZD pair moves between 50 and 60 pips per day, and the USDHKD currency set only moves by an average of 32 pips per day (when looking at the value of the currency pairs, most will appear with five decimal points).

The prominent Forex braces tend to be several liquids. However, there are also many possibilities between minor and foreign currencies, especially if you have specialized knowledge about particular money.

What is Money Management

Managing your money in trading operations involves implementing specific measures to increase your profits while minimizing possible losses.

Successful Forex trading has much more to do with effective money management than a good handful of profitable trades. Nevertheless, it is one of the secrets that separate those who trade Forex with long-term success from those who quit after a couple of operations.
However, for now, here are some money management fundamentals to guide your Trading:

Decide how you will finance your operations in advance

There is only one amount of money that is good to invest, and that is the product you are willing to lose, preferably without harming your physical and mental well-being in the process.
Every profitable trader is profitable in their way, while every loser experiences losses in precisely the same way. So remember, take every opportunity available to learn. It is a never-ending process!

Define your investment level

One of the most common questions about Forex Trading is how much I need to start trading? It is good for beginning traders to start small and work their way up.

Multiple Forex brokers have moderate minimum deposit levels to open an account. However, we recommend being careful with brokers that offer bonuses for certain deposit levels. They can be scams where it is challenging to withdraw your money in the future.

Calculate your Risk

Make sure you calculate your risk before Trading. It is probably not the right decision if the potential benefits are less than the potential risks. You can assess your chance with our free Forex calculator.

Determine the required earnings to cover any losses
Besides calculating the risks before any trade, it is also worth figuring out how much you need to recover those funds in any future employment.

It is often more challenging to get your money back than to lose it simply because your remaining investment is smaller, so you have to make a more significant profit (in percentage terms) to compensate.

An Easy Strategy ready to use

How to analyze the currency market if you are a Forex Beginner
While some novice traders may experience beginner's luck, this luck is rarely sustained over time.

For long-term trading success, a trader must be able to make informed decisions. These arrangements are the result of analyzing the market.

The analysis is vital for Trading. Charts are useful for short and long-term Trading, and you must follow the daily, weekly, and monthly charts.

Fortunately, there are several different approaches to Forex analysis, which means that every trader can find the right path for them.

The three general categories of Forex analysis are:

• Fundamental analysis
• Technical analysis
• Wave analysis.
• Fundamental Analysis

This form of analysis consists of keeping track of real-world events that could influence the values ​​of the economic instruments you want to trade.

Technical Analysis

The theoretical analysis focuses on what appears in the real world, including commercial, political, and business news and events.

On the other hand, technical analysis primarily focuses on what happens on trading charts. These record the price movements of different trading instruments over time, allowing traders to identify exemplars in price actions and make trading decisions based on the assumption that these patterns will repeat in the future.

The trader can see:

• The opening price for the period.
• The highest price point for the period.
• The lowest price point for the period.
• The closing price of the period.

This information can allow traders to judge the price movement of a currency pair. For example, if a Japanese candle closes near the highest price of the period, that would imply strong interest from buyers for this currency pair.

A trader may decide to go long to take advantage of that interest. Then, over time, common patterns emerge in the charts (and the formation of different candles), which can then predict possible future price movements and perform better trades based on these predictions.
Once a pattern develops, this is known as a Forex indicator because it indicates the potential to trade profitably. At the same time, there are various resources available online for information on the best Forex indicators.

Ideally, your trading software should have a series of built-in indicators that you can use for your Trading, such as the MetaTrader 5 indicators.

Wave Analysis

Wave summary, also known as Elliott wave analysis, is a well-known method that analyzes the price chart for a financial instrument's patterns and direction (trend).

The system is based on historical actions in market prices, believing that history reappears itself. This is due to market sentiment, which means that the market moves like a herd and reacts similarly to similar events and announcements.

Types of Forex Trading

Now that you know how to start trading Forex, the next step is to choose the Trading type that best suits your profile.

Fortunately, banks, corporations, investors, and speculators have been trading the markets for decades, which means there is already a voluminous range of Forex trading types. These include:

Currency Scalping

Scalping is a type of Trading that consists of buying and selling currency pairs in brief periods, generally between a few seconds and a few hours. This is an efficient strategy that involves making many small profits until those profits pile up.

Intraday Trading

Intraday Forex trading is a more conservative approach than scalping, and Trading focuses on daily price trends. Trades can be open between one and four days. In general, they focus on the main sessions for each Forex market.

Swing Trading

It is a medium-term trading approach that focuses on larger price movements than scalping or intraday trading. This means traders can keep a trade open for hours or a few days. This type of Trading is a good option for those who operate to complement their daily work.

How to manage risk if you are a Forex Beginner

Before making your first trade, it is essential to consider organizing your risk effectively in the Forex market. As we have already mentioned, Forex Trading provides the opportunity to perform operations with leverage.

This means that you can use a relatively small deposit to access a larger share of the warehouse (up to 500 times the value of your account balance if you are an acknowledged client). This multiplies your potential benefits to the same extent, and however, it also bears your possible losses.

Imagine having an account balance of 2000 EUR and putting all of that into a single trade to use an extreme example. Then, if the business goes wrong, you will have lost your entire investment.

The Forex market can move very fast, as can losses. Risk management is essential: to help you minimize losses and protect any gains you make.

For the sound management of your risk in Forex Trading, you should consider trading and money management psychology.

Mastering the Psychology of Trading

While it may sound strange to discuss the topics of mindset and psychology in a guide to learning Forex, the truth is that these are some of the most critical factors that separate successful traders from those who are not.

Developing the discipline of Trading and managing your emotions will help you stay calm under pressure. Enter and exit trades at the right time, either to cut losses or take profits before the market turns.

Some essential trader psychology tips to keep in mind include:

Keep calm

As exciting as Trading is, it is still a stressful job. There will be many impediments on your way to the top. For example, passions can force your hand to open a trade too early and close it too late.

The leading cause of stress for beginner traders is that some Forex trades will lose, even if the strategy is right.

Remember that war is not won in a single battle, and the important thing is the overall performance.

Explore your tolerance for risk

Each person has a diverse level of risk tolerance, which will influence the size of the chances they run, the losses they are willing to experience, and their psychological effect.

To manage your stress levels while Trading, it is crucial to consider your risk tolerance level beforehand and choose trading strategies that support it.

For example, someone with a low tolerance for risk would be more comfortable making many small trades over time and allowing the small profits from each transaction to accumulate. In contrast, a person with a higher tolerance for risk would be more willing to take larger trades, with opportunities for higher profits (but also higher losses).

Set realistic Trading goals

It is essential to be real with your trading expectations, and this will help you evaluate the best times to open and close trades.

Many Forex beginners have very high expectations about their possible profits, which creates their trade very aggressively, with substantial sums of money and quick decisions.
Again, we advise you to start small to test your knowledge and skills. Then, as you begin to achieve the results you want, you can set bigger goals.

Set your limits in advance

Before embarking on any exchange operation, you must have defined:

• The price at which you will open the procedure,
• The price at which you will close and get profit (take profit)
• The price at which you will complete, in case the market turns unexpectedly, thus reducing your losses (stop loss)

Conclusion

Generally speaking, the less you know, the more risk you take. On the internet, you have an infinite amount of information for free, such as:

• Educational videos on Forex trading for beginners.
• Educational articles and tutorials.
• Forex seminars for newcomers and specialists.

Forex Trading Webinars

If you want to learn to trade Forex, read everything you can, and always analyze whDo not read. Don't accept everything you read" "in good faith,"

Practice on a demo account or with simulation software
Each broker offers a demo account. It is good practice to use it regardless of whether you are a beginner trader or trying a new strategy.

Continue with it until the results are conclusive and you are confident in the effectiveness of what you are questioning. Only then should you open a live account. The volume of transactions should be below if you are a beginner trader or trying a new strategy.

Make sure to treat your demo account operations as real transactions. You can also use Forex simulation software to simulate market conditions and create an impression of a live trading session.

Do not complicate anything. Don't overload your charts with signs or your strategy with controls or switches. The more involved your trading strategy is, the more difficult it will be to understand and the less likely it is to be effective.

To know the average performance of a strategy in the different markets, we advise you to conduct the necessary backtesting and research.

Keeping a "straightforward" stance can be a real challenge considering the multitude of support tools you can apply to your charts.

Presently retain, it does not concern the number of tools you have at your disposition, but about using them expertly.

Beware of Volatile Markets

Volatility is the engine of Trading. Nevertheless, if you are not concerned, it can eradicate it. When it is flammable, the market moves sideways, what causes spreads to grow and your orders to slip?

As a beginning Forex trader, you must accept that anything can happen once you enter the market and defeat your strategy.

For example, the Swiss franc crisis in January 2015 closed the deal for many traders and brokers in the later hours.
Admiral Markets has developed a suite of advanced settings to minimize the risk of volatility and help you avoid the reef of financial markets.

The Trend is your Friend

Whether you are a beginner trader or a professional, it is best to trade based on what you see and not what you think. For example, you might think that the US dollar is overvalued and overvalued for too long. So, naturally, you will want to abbreviate, and you may be right in the end.

However, if the price goes up, it does not matter what you think, and it does not imply what anyone else believes: the price is going up, and you should trade with the trend.
The trade will be open until close.

The entry point into a profession is undoubtedly essential. Nevertheless, no less important is the starting point. If your strategy does not consider the exit level, it will not end well. So you are likely to suffer significant losses.

Make a Trading Plan

A Forex Trader, beginner or not, must develop the mindset of a business owner. Every business requires a business plan, constant monitoring, and regular audit. Negotiating without programs and processes is a sure way to fail. Therefore, developing a trading plan and following it is an absolute must.

Every day, be sure to write the following:

• Points for future research
• Reasons to open or close a trade
• Your achievements and mistakes.

Have your trading plan handy when you trade. A trading plan ensures that none of your actions will be in vain.

Good trade analysis will boost your confidence and motivate you to push harder and go further. Nevertheless, on the other hand, lousy trade analysis will help you extract value and improve.
You can trade the real market once you have practiced enough, either as a beginner trading or a new strategy! Click the image below and open a real account!