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Tips when starting with forex trading

As a beginner when it comes to forex trading, you first need to choose a broker that you can trust. This means that they should be well established, so don’t rely on the page your friend has started, nor does it hurt that they offer forex trading (of course!). We understand that it can be difficult to know which brokers are reliable and good, therefore we like to use a site called ForextradingAU to find the best forex brokers in Australia. On this page, there are experts who compare different traders so that you can focus on the fun, namely the trade itself. If you continue reading, we write about some more tips that you should consider when you step into the exciting forex world.

Get an Account:

It’s good if you choose to get an account with at least one trusted trader. When you have an account it’s to your benefit to take advantage of their services, such as their demo accounts so that you get to know the platform before investing your money.

Time:

Don’t start with forex trading if there is a lot happening in your life. Wait however long you need instead, Forex trading will not disappear within the next few years. Don’t be afraid to go to a library to gather information either, it will take a bit longer but the environment and the information in the literature may be worth it.

Choosing your strategy:

If you spend enough time gathering information and have played around with demo accounts, you will notice a strategy that works for you. Therefore, do not start with “Copy trading” because you find it simple, as other traders can choose strategies that you do not agree with, or at worst, makes you lose money. Also, do not forget to use the demo accounts every time you try a new strategy.

How does currency trading work?

When you are buying currency pairs, you are buying a currency while selling another. We start with a simple example to describe how currency trading works: USD / AUD is one of the most commonly traded currency pairs in Australia. USD is the US dollar denomination and AUD is the Australian dollar denomination. In this currency pair, the USD is referred to as the base currency and AUD is referred to as the counter currency. In this example, it means that you believe that the US dollar will be strengthened against the Australian dollar.

The correlation is nevertheless seen as a single unit even though it refers to two separate currencies. In other words, you trade the USD / AUD pair and not the USD or AUD.

We take one clear example to further clarify this by adding some numbers. Assuming USD / AUD is trading at 1.39300988, it means that every $ 1 = 1.39 AUD. In other words, the US dollar is stronger than the Australian dollar, or vice versa, you need more AUD to buy USD.

Currency trading opening hours

One of the major benefits of currency trading is its high availability. If you invest on the Australia Securities Exchange then you probably already know that it is open from 10 am to 4 pm on weekdays and closed on Saturdays and Sundays. Trading in currencies, on the other hand, is in principle always open, or at least during everyday life.