To start trading forex it is important to start from the basics; the exchange rate of a currency. This is the rate at which a certain currency is exchanged for another quoted currency, that is, it is the exchange price.
Something that of course must be very clear from the beginning is that in the Forex market all currencies are quoted in what is known as “Pairs” . For example, the most widely used pair is the EUR / USD, which means “Euro against the US Dollar” .
In these markets there are a large number of factors that will directly affect the rates of the currency pairs. Among those factors we have economic factors (such as production or inflation), political factors and even psychological factors, as you can see in our guide to the factors that affect the Forex market . These aforementioned factors have a huge impact on the markets, which is why they determine whether to buy or sell a particular currency pair.
To understand the above more clearly and easily, we are going to see an example of a Forex operation:
We will use the most common currency pair in Forex, the EUR / USD, this means that the EURO will be our base currency and the DOLLAR will be our tradable currency, this represents how many US dollars can be bought with one euro.
If based on the analysis it is thought that the Euro will have an increase in its value against the Dollar, what we must do is “BUY” euros. On the other hand, if the exchange rises in our favor, we would proceed to “SELL” the euros, obtaining a profit. This would be the basic concept of how profits are obtained in operations.
How to perform a Forex trade?
The first thing we have to do is choose the Forex broker and of course we also have to choose the right CFD to start trading.
One of the leading brokers in the Forex market is Libertex.org , which has demo accounts and totally free, it also has tutorials and puts at your disposal highly qualified customer service agents in case you need advice or more services.
Libertex is just one example, you can get many brokers that offer different benefits according to your needs, it is important that you choose wisely and review different options before venturing into the Forex World and take into account the risks it represents. It is important to always start with a very small capital that we are willing to lose, because in forex trading it is very difficult to make a profit and most traders lose money operating in the market.
Once you have chosen your broker, have sufficient training, have tried demo accounts and understand the risks of trading forex, you can think about making your first real trade.