Forex Trading Advice For Newbies
There are two basic types of positions in forex trading. The first is the short position and the second is the long position. A short position is when you sell a currency in anticipation of its value falling. The goal is to eventually buy it back at a higher price than you sold it for. In this example, you would buy the Euro at USD 1.1916 and wait for it to depreciate in value before selling it back at a higher price.
To increase your chances of success, you should combine good research with efficient execution. Besides, you should also be creative in your trading approach. A good foreign exchange trader can earn from five to fifteen percent per month. You don’t need a lot of money to start, and you can invest as low as $500 or $1,000. Nevertheless, it is important to understand how forex works before you try it out on a real account.
The advantages of Forex trading include low initial investment and high profit potential. With a minimum capital of $500, newbies can trade using a leverage of 1:500. This leverage can bring great profits but also high losses. In addition, foreign exchange has low or no trade commissions. Instead of paying a fee on the exchange, brokers make their profit from the spread, which is the difference between buying and selling.