Forex trading can be a daunting task than stock trading. One thing you should know is that the forex market is actually simpler and straightforward than the stock market. The first thing to do is open a trading account with a retail broker. There are some paper activities that are included when opening an account. You are required to provide some basic information about your financial condition. When your application is approved, you can fund your account so you can start trading. Another important issue is that you must choose the contract size and leverage that you want to use when trading.
In forex trading, leverage is important because it indicates the percentage you want to invest in the trade. Some common leverage ratios include; 10:1, 20:1, 50:1, 30:1, 100:1. Trading with higher leverage increases your profits and losses. It is important to understand currency pairs. Within forex, each market measures the value of one currency against another. An example is in EUR/USD, the value of the EUR is measured in US dollars. Examples of other markets include the USD/JPY, USD/CHF, and GBP/USD. Note that the order of the coins is very important. You can either buy or sell any currency pair. All you have to make sure is that you sell the coin at a better price that makes a good profit. For example, you can buy GBP / USD. In this purchase, aim for the pound to have a higher value than the dollar.