Trading is considered the most promising investment for the accumulation of funds. There are different trading strategies that you can use considering its immense popularity all over the globe. Because of this, it is therefore very important to understand the basics of trading including the trading tools from MyFXBook.
The currency exchange market is widely open 24 hours a day, 5 days a week. However, this 24 hours a day trading session is somewhat misleading. There are actually three trading sessions which include the United States, European, and Asian trading sessions. There are overlaps in these trading sessions but the main currencies are always traded during these market hours. Because of this overlap, some currencies will have more trading sessions than others. Traders who are using USD will have the most volume of trades.
In the Forex market, currencies are being traded in pairs. You purchase one currency and sell the other currency in the market. Moreover, almost all currencies are being priced on the fourth decimal point. This is called pip, or the smallest increment of trade. One pip equals 1/100 of 1%.
‘Spread’ is the difference between the bid and ask price in the market. Brokers usually don’t receive commissions but they are profiting through the spread. The more stable and liquid the currency pair, the lesser the spread. Those volatile pairs will most likely have wider spreads. Spread trading is a common trading strategy that simultaneously places short and long trades. This will give you a slightly bullish or bearish position, limiting your upside and losses.
Scalping is known as the shortest trading time frame. Aside from Forex, this strategy can be used in futures and stocks. Scalpers are types of traders who exit a trade almost immediately after their last trade becomes profitable. Their trade usually takes place within seconds or minutes at most.
Demo accounts are very helpful especially if you are new to the market. It offers a risk-free environment for traders who don’t have experience in the market or those who want to test their trading strategies. Usually, demo accounts last for 30 days after signing up. After that, you won’t be able to renew your demo account and you cannot log in with the credentials that you use to sign up for an account. Demo accounts allow you to feel what it feels like to be in the live market, trading currencies and reaping profits. These accounts are given by brokers upon signing them.
Different trading strategies in Forex depend on the type of trader that you want to become and the instruments that you want to trade. There are currently a lot of trading tools that you can use to trade effectively and profitably. Tools for analysis include Tick charts, Renko charts, candlestick charts, volume charts, and others. These chart analysis tools give you an edge in the market. Trading tools from MyFXBook will help you trade with ease in the market.