Basic trading Knowledge of Forex

Basic trading Knowledge of  Forex Part-II

• You must have idea about Forex quote. In Forex quote you will see bid price in the left and sell price in the right.
• Then decide what currencies you want to buy or sell.
• Economy has a great factor in change of currency price. You need to make a good prediction about the economy of the US, if you want to buy US Dollars. If you think US economy will continue weaken then you should not buy rather sell if you have any.
• You should have a good idea about the trading position of the country. If a country has many goods to export then its economy will boom and their currency value will increase.
• Politics plays an important role in the economy of a country. If the political condition of a country remain calm. Then the economy of that country remain stable.
• Keep up to date with the economic report of the country.

How to calculate Profit:

You come to this business to get profit. If you do not get profit that business will not be interesting to you.

• A pip measures the change in value between two currencies. Usually, 1 pip equals 0.00001 of a change in value. For instance, if your EUR/USD trade moves from 1.546 to 1.547 your currency value has increased by 1 pip.
• Multiply the number of pips that your account has changed by the exchange rate. This calculation will tell you how much your account has increased or decreased in value.

Analyze the Market:

There are several methods of analyzing the Forex market:

 Technical Analysis: 

Technical analysis involves studying of price movement of the currency. With the charts and historical data you can predict the movement price based on past experience.

Fundamental Analysis:

Fundamental analysis involves the whole study of economic and social condition of the country. Fundamental analysis can play a vital role in your trading. It will help you to make correct decision.

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Basic Trading Knowledge of Forex

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