How to trade Forex
Written by Martin Grippen. Visit also my Google Plus site ,Facebook site. and my blog about Forex.
The most liquid market in the world is the foreign exchange market also known as the Forex market. The market is open 24 hours a day 5 days a week.
Traders in the market are trading currency pairs and earn a profit when the currency prices rise. Changes in the prices are called pips and the values of the pips depend on the invested capital.
The preferred currency pairs traded in the market is the EUR/USD, GBP/USD and USD/JYP.
In the graph is the EUR/USD illustrated. The curve can be illustrated in different time periods. It is an advantage if the 5 minute chart shows an uptrend and the trader want to Identify if the trend also is a trend in the long run.
The curve is illustrated as a line but could also be illustrated with candle sticks. If the candle stick is green the price is moving up and if the candle stick is red the price is falling. Is a price rising is the market bullish and if the market is falling is the market bearish.
Some of the success criteria a trader has to meet if he wants to have success in the Forex market is to have a trading strategy. It is a plan that tells the trader how to trade. A plan could consist of a Stop/Loss level and exit point in a trade.
Some traders trade with indicators. It helps them to determine the trend direction. It also helps them to determine if the market is in an over-bought or in an oversold condition. Indicators are easy to use when the trader first has learned how to use them. A benefit using indicators are that the trader learns how the currency curves develop as he has to study the curves. The reason for studying the curves are that he has to watch the criteria for using the indicators are met for entering a trade.
Some of the indicators PLUS500 offers are described with links on the front page of this site.
The title of this text was how to trade Forex. On my blog is a blog post describing step by step how to enter a trade using the trading platform PLUS500. The trade is a share but it also illustrates how to trade Forex.
