Forex trading Beginner's guide
hi friends today i'm going to talk about Forex are you considering to start Forex trading? and do you understand about how it works? in this video, I'm going to explain about how to trade in Forex, how to start it and expertise for you also please refer to this video and make a decision if you actually start Forex trading okay, let's jump into it first, the meaning of the word Forex is that Forex is short form of Foreign Exchange Forex is that for example, when you go to travel to foreign country you're going convert your currency to local currency this is what is called Forex also when you bought foreign stock shares also when you bought foreign stock shares with your country's currency exchanging currencies will be done automatically also this is what is called Forex or in another example a car factory produces cars in their country they make cars with their country's currency then after exporting abroad profits come in foreign currency then a company is going to exchange money that received in foreign currencies into their currency also this is what is called Forex Forex market is active 24 hours incessantly so in exchanging currencies between countries what does it mean to make a profit by Forex? for example let's have a look at the relationship between euro and US dollar buy euro when euro price is low against US dollar then sell it when euro price rises you can make profit on the price difference also sell euro when euro price is high against US dollar then buy back euro when the price falls so you can make profit on the price difference you must have thought i don't have the euro in the first place how am i going to sell it first? when you open an account in a broker and deposit margin then you can borrow euro from a broker so yo sell it first then buy back it when the price rises after that you'll give euro back to a broker you'll make profit on the price differences so where can we check prices? today, i'm going to use Tradingview for explaining so this is known as price chart you can google to find it also you can check a chart on a platform provided by a broker i'll explain about a chart with Tradingview today you can check some price chart on tradingview like stock market, bonds, commodity and crypto currency not only Forex market first of all, this one on the upper left is called a symbol in Forex, we can't trade only euro, US dollar nor japanese yen in Forex, we exchange from one currency to another so always paired with two currencies a currency pair is euro vs US dollar on this chart and this chart shows how much euro against US dollar how much one euro in US dollar in another example here is british pounds it shows how much one British pound against US dollar also Us dollar vs Japanese yen it shows how much one US dollar in Japanese yen i'll close up here then here are some bars they are known as candle sticks and this box is called real body and the lines that extend up and down are called whiskers what they indicate is there is a thing called timeframe and this chart shows daily time frame now daily timeframe means one candle stick indicates price movements in a 24 hours period in another example this D means day timeframe i'll switch to the 4 hours timeframe a candle stick indicates the price movements in 4 hours period in another example, i'll switch to the 15 minutes timeframe a candle stick indicates the price movements in 15 minutes period so this red color candle means the top of this box is the open price the open price is the initial price when the previous bar ends and the next bar begins and the bottom of this box is the close price close price is the price when 15 minutes period was ended and upper whisker indicates highest price in a period and lower whisker it indicates lowest price in a period so in this case, a red color candle means the price has decreased over the time period on the other hand on this green candle's bottom of its box indicates the open price the top of this box indicates the close price the upper whisker indicates highest price and the lower whisker indicates lowest price so this green candle stick means the price has increased over the time period so what you need to do before you get start to trading is you need to open an account in a broker I'm not going talk about opening an account with a specific broker in this video you're able find any brokers on a internet so if you find best broker for you you need to open an account in the same way as you'd open it in a bank and deposit margin into it then you'll be able to trade with a platform provided by a broker the next thing i'm going to explain what you must know before you get start it first, trading fees trading fee is the profit of a broker you have to pay trading fee every transaction there is a broker doesn't charge trading fee but it doesn't mean you can trade with zero cost there is a hidden cost a hidden cost is the cost called spread what the spread is i'll switch to 1 minute timeframe so you'll recognize red line and blue line here this red line is the price when you buy this blue line is the price when you sell so prices are different and actually all price chart show sell price if you're about to sell it now you can sell it with current price but if you're about to buy it now you can't buy it with this price the price a little bit higher than this price you only can buy it with a little bit higher price due to spread due to the fact that price spread you'll lose money if you buy and sell immediately you only could sell a little bit lower price when you do immediate trade so you'd make loss this is a hidden cost depending on the broker, there are accounts that spread is zero some account's spread is fixed at zero but the broker which fixes spread at zero, charges trading fees so as to make profit so the broker which uses wide spread, charges no fees and the broker which fixes spread at zero or small, charges trading fees so how to place order is there are two major way to place orders a market order and a pending order a market order is an order that can be placed immediately this is a market order as you can see for example, if i buy now the order was filled straight away a market order allows you to fill an order as quickly as possible so now i want to sell this immediately i can sell it straight away this is a market order there is another placing an order method about a pending order, for example if i want to buy it at a lower price than current price or if i want to sell it at a higher price than now i can book an order here let's try that i want to place buy order at a lower price then here, the order has not been filled yet when the price falls down to this line, automatically the order will be filled and also if i want to sell it when the price rises i can book sell order here when the price rises over this line the order will be filled automatically so i'm going to share a little bit more expertise you must know before you get start it about currency unit in Forex, pips are used to express the amount of money 0.0001 equal to 1 pip, in most of currencies on this chart, $ 0.0001 equal to 1 pip there are some exceptions Japanese yen and Swedish krona's decimal points are in different positions so ¥ 0.001 equal to 1 pip and also about order quantity in stock market we count as share units and in Forex market we count as lot units the size of one lot varies depending on the broker there is a broker with 1 lot of 100,000 currency, 10,000 currency broker and 1,000 currency broker so current EURUSD price is $ 0.984 then multiply 0.984 by 10000 if a broker's 1 lot is 10,000 then the trade will be $ 9,840 trading amount will be $ 9,840 per 1 lot most of broker have from 0.01 lots
and up to 300 lots or 500 lots so if you place an order with 0.01 lots the trading amount will be $ 98.4 and about another thing 1 lot equal to $ 9,840 and you don't have that much money you must have thought i'm not able to trade with 1 lot but actually Forex has margin trading leverage can be used leverage means you can trade more currencies than you own how many times the leverage can be applied depend on brokers and countries in japan, leverage can be apply up to 25 times so if you want to trade with 1 lot which is $ 9,840 you need to deposit margin 1/25 of $ 9,840 so $ 393.6 if you have it in your account you're able to trade up to $ 9,840 there are pros and cons to use leverage about pros you're able to make profits more than your budget about cons when the price moves in the opposite direction than expected you will make loses more than your budget for example when placing buy market order here stop loss point needs to be decided when you buy here and you think i'm not going to win if the price goes down this far then the lose must be determined when the price falls here when you don't want to make the lose more than that a pending order can be used you place buy market order here and sell pending order here at the same time Forex is extremely simple game basically a game where you just guess whether the price will go up or down coin toss game it's extremely simple even people who are not familiar with forex trading It's an intuitive game So how can we guess where the price will go up or down? there is only one way to know that Forex rates will be decided by an exchange ratio of the amount of currencies between countries like the total volume of euro in circulation and the total volume of US dollar in circulation Forex rates will be decided by an exchange ratio with them about the details of that i explained in another video please watch it after this video the accuracy of this method is around 70% but this method works only for long time period like few years we're able to know the price only six months or a few years from now you must have thought after I buy or sell it now I intend to hold the position until the price reaches the expected price however, brokers add extra fees to traders who hold long-term positions when you hold positions to next day and next week a broker adds extra fees to you Forex trading is not designed for long-term holding brokers need you to day-trading because they want to get fees they want to you to trade more and more to get a lot of profits Forex trading is designed for day-trading i told we only can guess the price of a few years, or 6 months ahead from now In short periods like 6 or 3 months, prices move only randomly random means it's impossible to guess prices so how can we make profits from random price movement? It is commonly known that technical analysis is the solution i explained about technical analysis in another video please check it out later So, about exactly how to make a profit there is only one truth The truth is that you actually start your own business and become a forex broker or to work for the company or learn about technical analysis then deliver information as a youtuber what i'm saying you're not going to win 100% in Forex trading losing rate is 100% not 99% you're losing 100% Forex trading is designed for it probably youtuber or blogger other than me also advertisement give you only info on how to win because telling about you never win in Forex won't make money for them influencers other than me talk about how to guess the price in future and make a profit by technical analysis but all of that info is fake and those influencers are scammers an unbelievable number of people are spreading lies probably people who come to watch this video are considering to start Forex and expecting to get info on how to make a profit i apologize you if i made you disappointed do not try Forex trading Forex market is a largest gambling platform and i told the price movement is random so there is always a 50% chance that the price will go up or down even you do best performance winning rate is 50% also there is trading cost In fact, you will gradually lose due to trading fees and if your performance is bad you're going to lose more you're not going to win even you're over performance most people go bankrupt in less than a year and exit the market that means everyone trade Forex right now is beginner they're all beginners who doesn't have enough knowledge and experience it's like you offer to be ripped off for scammers it's like you're announcing please rip me off if you start Forex trading you are prey to brokers and influencers however you never listen my warning because people only can listen what they want to hear you're able to smoothly listen to information to win but information about you can't win you'd shut it out so probably you're going to start Forex whether i warn you or not It's addictive like gambling you're not able to stop even after 5 years or 10 years that would be better if you could quite after 5 or 10 years then you'll realize how much effort, money and time you wasted however, you're still considering to start it so there is paper trading which you don't need to use real money please start from that and at least one year if you keep to make profits over a year maybe you can try Forex with real money If it is a period of 3 months or 6 months you may continue to win by just a luck as i told you winning rate is 50% everyone has chance to win in a short period by just a lucky due to fluctuations in probability but on one is able to win after that period even fluctuations in probability changes winning rate the probability converges to 50% by the law of large numbers so you definitely lose please start from paper trading if you still about to start Forex actually, if you have money for Forex invest it into S&P500 or stock market, not Forex and hold it in long period of time it is very profitable for you
2022-11-03 08:08
