Forex Trading basics and terms
Forex trading is one of the fastest-growing industries today with the number of participants rising on a global scale. For beginners, however, there may be several doubts in mind that need to be resolved before putting forth their foot in the sector. There are many institutes offering value-added professional forex trader course that will help amateur traders to get acquainted with the skills and techniques.
Forex trading as a career option
Yes, the field can be engaging and lucrative but only if you thoroughly understand the dos and don’ts of the business. It is a risky domain and to start career with forex trading, one requires the expertise of a high level. However, to go for a career as a forex trader, one does not require any formal training or degree. Different job profiles for financial experts are as follows:
- Currency Analyst or Strategist – Such professionals work for a forex brokerage and conduct research activities by means of technical, fundamental or quantitative analysis
- Professional trader or Institutional Trader
- Forex Regulator – They help to prevent occurrences of fraud in the industry and essays multiple roles
- Customer Service Positions
- Forex Software Developer – They aid in creating trading platforms for brokerage
Side effects of forex trading
For everything that comes easy, there have to be some hidden obstacles and forex trading is no different. The most obvious and evident disadvantage of trading forex is overleveraging. Forex as an asset offers high leverage which means a trader can trade with more money than he actually owes in the trading real account. This may prove dangerous when you keep on getting losses. Therefore, leaving your job for the trading business is profitable only for a person who has a thorough knowledge of the domain.
Basics for online forex trading for beginners
Forex trading as a business is different from investment as in the latter case, the asset can be held for a longer duration. For a beginner understanding the concepts of trading from scratch is important to survive in the competition:
- Forex – It is nothing but a short form for foreign currency
- Forex pairs – In forex trading, trading is done in currency pairs which means a currency is traded against another
- Pip – It is a Percentage in Point and it usually measures the difference or the extent to which the price has changed
- Spread – It is the difference between the sell price and asks price
- Bid and Ask price – Ask price is for buying while the bid price is for selling
- Volume – It is basically the amount you are putting for trade
- Bullish and Bearish – It is a reference to the side you are on. If you predict a rise in price then you are bullish and vice versa
These are the most commonly used basic terminologies that go with every kind of trading. Trading can be done with different kinds of securities or assets but owing to high volatility and leverage, forex is the most preferred asset for most the traders. Beginners usually prefer to play with forex as it provides for high returns on small or minimum investments. Trading can be lucrative but for skilled traders, it is profitable as well.