In Forex trading, currency pairs are traded. Forex trading takes place directly between market participants and is possible worldwide. It is no longer only of interest to banks and companies, but more and more private investors are also investing in Forex. The forex market has become the world's top-selling financial market. It is now financially stronger than the stock market and is an alternative to stocks for many private investors. Forex for beginners can be learned with the free demo account, with which you can trade without real money and learn the basics of forex trading. With many Forex brokers you can open a trading account with MT4, for example also with FXTM and Naga Markets.
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Fundamentals of foreign exchange trading
Forex is the abbreviation for Foreign Exchange, which means forex trading. Currency pairs are traded. You are betting on the exchange rate development of a currency against another currency. You can make profits in Forex trading with both price rises and falls. You should be well informed about the recent exchange rate development of both currencies in order to buy and sell at the right time. High profits are possible in Forex trading. Especially for beginners in Forex, it is essential not to lose sight of the possible risks. Forex trading also poses a risk of total loss, forex trading is possible with almost any currency if the currency is freely tradable. The most common currency pairs are
- Swiss Francs and Euros - US Dollars and Euros - British Pounds and Euros - Japanese Yen and Euros
Forex trading is also made with smaller currencies from smaller ones Countries possible. The range of currency pairs varies depending on the forex broker. If you want to trade successfully with Forex, it depends on the right broker on the one hand and the right strategy on the other. Without strategy and without forex knowledge, you will not be successful. You should watch the price development of the currencies and also pay attention to which additional options the brokers offer with which you can minimize the losses. Under no circumstances should you trade directly for real money. Reputable brokers offer a free demo account, with which you can only try Forex trading with virtual currency.
The most important Forex terms
Beginners of Forex should know about the most important ones Inform terms in forex trading. These terms also play an essential role in choosing the right broker via the broker comparison. With the different strategies in Forex trading, you must also consider these terms. If you want to start trading Forex and trade with real money, you need a trading account that you can open with the MT4 trading platform. In Forex trading, you can open a long position where you bet on a rising price. In contrast, if you are short, you are betting on a falling price.
If you are long, you are buying a base currency because you expect the value to increase. In a short position, you sell the base currency as the price is expected to fall even further. A pip is the smallest unit, i.e. the fourth digit after the decimal point. A pip expresses the change in price of the traded currency pair by 0.0001, and a lot is 100,000 units of the base currency. For large market participants, which include large corporations and banks, 1 lot is the common size because they trade currencies in the millions and billions. Private traders do not act in such dimensions. You trade with mini lots of 10,000 units or micro lots with 1,000 units of the base currency.Another essential term is the spread, which is the difference between the buy and sell rates. The spread is fixed for some brokers, while for other brokers it is dependent on market fluctuations.
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The leverage effect on Forex
The Forex brokers require a security deposit in order to counteract to secure a failure. This security deposit is deposited as margin if it is a business with a lever function. The margin represents a certain percentage of the amount traded. The name for this percentage is margin. How strong the leverage is depends on the amount of margin. In Forex trading, you can set a leverage that allows you to move large amounts of capital. The CFD lever can be set at different heights. With some brokers you can even set a leverage of 1: 500. If you would like to trade on the currency pair of US dollars and euros, you can speculate with a leverage of 1: 150 for a sum of $ 15,000, even though you have only deposited a security deposit of $ 100. You can use the lever to move significantly higher amounts than your bet. If you make a profit, the lever can make the profit significantly higher than your bet. However, leverage is not always advantageous. A loss can also be significantly higher than your stake. If there is credit in your trading account, this credit can be used to compensate for the loss. With most reputable brokers, you can avert losses by setting a stop position. If this stop is reached, the currency in question is sold immediately. With this stop, you avert losses, and some time ago some brokers were required to make additional payments. If there was not enough money in the trading account, you had to add money. Such an obligation to make additional payments no longer applies to brokers in Germany.
Choosing the right broker
As a beginner in Forex, you must first find the right broker before you can open a trading account with MT4, The broker comparison helps you to choose the right broker and offers you an overview of the conditions:
- Minimum deposit on the trading account- Minimum bet for a trade- Spread amount- Possible leverage
Via the Broker comparison, you can call up test reports on the individual brokers, which provide detailed information about the conditions at the individual brokers. The test reports also tell you which currency pairs can be traded and which additional functions are available to limit losses. Seriousness is very important when choosing a broker. An essential foundation in Forex for beginners is that you recognize a reputable broker by the regulation by a state regulator. Most brokers are based in Cyprus, where the best tax framework applies. They are regulated by the Cyprus Securities and Exchange Commission. If a broker is based in Germany, it is regulated by the Federal Financial Supervisory Authority. As a beginner to Forex, you should definitely pay attention to regulation. Only regulated brokers grant their customers deposit insurance. Your deposits are also safe if the broker gets into payment difficulties, and reputable brokers are characterized by a low minimum deposit and low spreads. They are transparent and have extensive information on their website. Good service is a matter of course for these reputable brokers.
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The trading platform MT4
Would you like to trade with Forex and do you have the Broker comparison found a suitable broker, you need to open a trading account. Numerous brokers use the MetaTrader 4 (MT4) trading platform. The MT4 trading platform offers all common settings and numerous setting options. MT4 can not only be used for forex trading, but also for CFD trading, trading in futures and other trading options. MT4 offers various advantages for Forex trading:
- Stop-loss and take-profit orders to minimize losses and increase profits- Trading with micro-lots as the lowest trading sizes for better risk management- Positions can be partially closed
The spreads for MT4 are mostly very small. With MT4 you can use technical analysis tools, for example charts in the form of bar, line and candle charts. These charts provide information about the course of the currency pairs. You will learn how the courses have changed recently. The candle charts are particularly clear and informative. Wicks that point down represent falling prices, while wicks that point up indicate price increases. If you want to open a trading account, you must first register with the broker with your personal data and submit your registration. If the registration has been checked, you will receive an e-mail for confirmation. With a click on the link you activate the trading account. You can now make your first deposit and get started with Forex for beginners.
Learn Forex trading with the free demo account
As a beginner in Forex, you shouldn't trade real money right away, because that is far too risky. You need a good strategy that you have to learn over time. The MT4 trading platform provides the free demo account that is offered by reputable brokers. The demo account is linked to the opening of a trading account, but you do not have to make a deposit yet. The demo account provides you with an amount of virtual currency that varies depending on the broker. Depending on the broker, you can only use the demo account for a certain time, for example 30 days, or for an unlimited period. When trading Forex, it makes sense to have a demo account that is available to you indefinitely. This means that even if you already have experience with Forex, you can still work on your strategy and try out new trading options. The demo account reflects a real trading atmosphere. You can trade with any currency pairs that you can trade with real money. Just like when trading with real money, you can also use various additional functions with the demo account, for example stop-loss orders. The demo account provides you with all trading instruments that are also available when trading with real money, such as charts. When trading with the demo account, you can place different amounts of stakes and set leverage. You will learn how volatile Forex trading is. Both high profits and severe losses are possible with virtual money with the free demo account. Only when you feel safe, do you trade real money on the MT4 trading platform.
Tips for beginners in Forex
If you want to start trading Forex, it may be tempting high leverage because they promise high profits. However, you should be aware of the risk and act accordingly. Before you trade with real money, you should use the free demo account. Right from the start, you should get used to the trading instruments and find out about the price movements of both currencies with which you trade. The courses fluctuate widely. Price fluctuations have different causes:
- buying and selling behavior of investors - current economic situation in the countries whose currencies you trade - current political situation in the countries whose currencies you trade
Not only The economic and political situation of the respective countries plays a role in the course development. The current situation in the world economy and world politics can also affect currency rates. Trade only currency pairs you know, and if you are a beginner in Forex trading with real money, you should only make small bets at the beginning. You can slowly increase the stakes later. You should only spend an amount on forex trading that you can afford to lose. You should not set the lever too high, so that the loss is not too high. Even as a beginner, you can already secure your forex positions by setting the right stops. You can try it out with the demo account.
Conclusion: trading platform MT4 with many options
Forex trading is becoming increasingly popular. It can be done through online brokers such as ETFinance. It is traded directly between the market participants. Private investors are also increasingly trading Forex. They trade currency pairs and can make profits not only when prices rise, but also when prices fall. Numerous online brokers where you can trade Forex use the MT4 trading platform. It can be used not only for Forex, but also for other trading options such as futures or CFD. The trading platform offers a variety of trading instruments, including charts. You can easily open a trading account via the MT4 trading platform. You can try Forex for beginners with a free demo account that reflects a real trading atmosphere. You should make sure that the demo account is available for as long as possible so that you can still work on your strategy even if you are already trading with real money. Forex trading is very volatile. High profits are possible as well as high losses. With stops you can limit losses. As a beginner to Forex, you should familiarize yourself with various terms such as spread, lot and pip. Leverage is also essential because you can use the lever to move large amounts of capital. The broker comparison helps you to choose the right broker.
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