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Forex Trading Advice For Newbie Traders

Traders in the forex market speculate on the value of currency pairs. They do this by purchasing one currency and selling another. They do this with the expectation that the price of one will rise, and the other will fall.

Leverage allows traders to trade up to PS50 for every PS1 of capital. However, leverage can cause substantial losses. Most regulated forex brokers limit the leverage available to retail traders. Leverage ratios are usually 1:30 or 1:50.

The Forex market is the largest financial market in the world, with an average transaction volume of 3.6 trillion dollars per day. It is a truly global market. Its low transaction costs make it a highly attractive market to trade in. There is 24-hour activity in the market, with four major trading sessions each day.

Traders can make use of fundamental and technical analysis to determine the direction of price movements. They also use momentum indicators to determine the strength of the price movements.

Most traders start out by trading in their spare time. They use a demo account to get a feel for the market before opening a real account. There are also trading platforms that provide free demo accounts. These platforms allow newbies to practice their skills and develop a trading strategy.

Forex traders can also use derivative products to go short on other markets. These products can be used to reduce losses while maximizing profits.

Forex traders can also enter private contracts to lock in an exchange rate for a specified amount of currency on a future date. These contracts are used by large companies with international operations.

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