Forex Trading Advice For Beginners
Forex trading is a relatively simple process that involves betting on the value of one currency compared to another. The first currency in a pair is known as the base currency, while the second currency is known as the quote currency. The trader must decide whether the base currency is stronger or weaker than the counter currency to win a bet.
The forex market is made up of various currencies from around the world. The prices are not fixed and change daily. They are affected by the supply and demand of each currency. Generally, the higher the demand, the higher the price. News and world events can also affect the exchange rate. Nevertheless, daily fluctuations are minimal, and most forex traders hold positions for only a few hours at a time.
Trading is conducted over the counter, without the assistance of a central exchange. This makes the forex market truly global. There are four main trading sessions each day that are timed to match the opening hours of major banks, and these sessions overlap. Moreover, the forex market’s opening hours vary with daylight savings time, so investors should be aware of these differences.
For beginners, forex is an excellent market to enter because of the low cost of trading, a large number of free educational sources, and the opportunity to practice on a demo account. However, new traders should still exercise caution and ensure that they have a thorough understanding of the forex market before trading in live currency. The global currency market is a unique market in terms of accessibility, size, and opportunities.