E1: UNDERSTANDING TRADING MARKETS - FOREX TRADE

;

DISCLOSURE: I receive benefits to pay bills and cater for expenses only if you purchase through ad links placed on this page. It is a commission from the company as a compensation to keep up the good work, and this only can be redeemed if you make purchases using my ad links – at no hidden costs to you. Please take note that I only recommend products and services that I find useful and helpful. If you choose to purchase through ad links on this page, Thanks for your support!

                           

FOREX TRADING- An acronym for Foreign Exchange- also called Currency trading, where you tend to buy a certain currency when the price drops, and quickly sell it when the price inflates (goes up). The major aim is to make profits in currencies fluctuation. It is done 24/7.              

STOCK TRADING: This involves the buying and selling of stocks, it is quite different from FOREX trading just because FOREX deals with currencies. This market is open only during certain hours of the day. The stock markets can sometimes be manipulated by insiders and market makers. This cannot be done in FOREX.

Margin Trading- the practice of buying stocks with money borrowed from the broker, is permitted by many FOREX brokers, but an option offered by brokerage houses or banks in stock trading.

    BASIC FOREX TERMS

BASE CURRENCY: The type of currency you are spending. The currency you trade with to purchase another currency. E.g. you want to trade dollars for pounds sterling, dollars then becomes your base currency.

QUOTE CURRENCY: The currency you are purchasing with the base currency. Just based on the given example, pounds will be your quote currency.

EXCHANGE RATE: The amount of base currency you need to purchase another in quote currency. Vice versa.

LONG POSITION:  This is done when you want to buy the Base currency and sell the quote currency.

SHORT POSITION: This is done when you want to buy the quote currency and sell the base currency.

BID PRICE: This is the price your broker is willing to BUY base currency in exchange for quote currency. The best price at which you’re willing to sell your currency in the market.

ASK PRICE (OFFER PRICE): The price which your broker is willing to SELL base currency in exchange for quote currency.

SPREAD: The difference between the bid price and Ask price.

The secrets to increased profits is to keep repeating what works until it works no more, and to ditch what brings poor results.

BROKER in this case is the online company which you are trading with, ensure you read a broker’s terms and conditions before signing up.

DISCLOSURE: I receive benefits to pay bills and cater for expenses only if you purchase through ad links placed on this page. It is a commission from the company as a compensation to keep up the good work, and this only can be redeemed if you purchase using my ad links – at no hidden costs to you. Please take note that I only recommend products and services that I find useful and helpful. If you choose to purchase through ad links on this page, Thanks for your support!

FREQUENTLY ASKED QUESTIONS.

Q: There are numerous brokers worldwide available online- which one can I trust?

A: Forextime is a Cyprus-based company and also an affiliate partner to PrestsBlog, it is currently serving millions of people, and they handle complaints from their clients with just a click call. This is a trusted and referred broker.

Q: How much can I start trading with?

A: You can get up and running with as low as $5 or its equivalent, but to get adverse knowledge about this trading sector, it is advisable to start with a demo account.

    The comment box and email is open for more questions and suggestions.