Things You Need to Know About Forex Trading

1. Forex trading is possible from anywhere and anytime.

The forex market opens at a specific time. There are four major trading sessions: Sydney (Australia), Tokyo (Asia), London (European), New York (American), Session. Each trading session opens one after the other, as if forex trading never stops. Forex traders can trade around the globe 24 hours a days for 5 days. Forex traders can trade before they go to work, before bed at night, and even during breaks.

2. Forex trading online requires internet access

Before we get into the topic of forex trading, it’s important to understand what infrastructure is needed. You will need an internet connection and a computer, smartphone, or laptop to be able trade forex online. You can also download and use the free forex trading platform software. You can register for a demo forex account if you are interested in learning how to trade forex but don’t need to trade.

3. Pairs are used to trade currency

Forex trading involves buying and selling currencies. This can be done between two currencies. Mention is always paired to indicate which currency is in front. The US Dollar is often paired with the British Pound, which is abbreviated GBP/USD. Or, the US Dollar combined with the Japanese Yuen is USD/JPY.

4. Forex traders can make money when the prices go up or down

Forex trading is limited to two types of positions:

  • Buy/Long Position: A buy position is opened when the currency pair’s price is expected to rise. A Buy position is when we are looking to profit from the rising price of a currency pair. If you wish to Buy, then we need to ensure that the base currency’s value will rise. We will buy at a lower price and then close the position at an even higher price.
  • If the currency pair’s price is expected to fall, a Sell or Short Position is created. A Sell Position is when we are looking to profit from a decline in price. If you are looking to sell, make sure the base currency value will drop. The base currency value should be lower than the opening price, so we buy at a high level and then sell.