Have you never understood anything about Trading and are you looking for beginner training? If you want to learn how trading works, this post will help you.
Let’s start from the beginning: what is trading?
Trading is a process that goes on the financial markets, using someone’s trading platform. You can put, buy and sell orders for Forex, ETFs, CFDs (Contracts for difference), etc. on it. The goal for a trader is to buy or sell a financial instrument at a certain price to earn money. Be careful, trading is an activity that can make you lose money.
Before starting trading, it is important to know the basics.
The currencies
Forex trading is trading currencies such as the US Dollar USD or the Euro, the Japanese Yen JPY and many others (get forex trading license). These currencies are traded on the Forex market as a currency pair, the most traded of which are as follows:
- EURUSD, the Euro against the US Dollar
- GBPUSD, the Pound Sterling against the US Dollar
- USDJPY, the US Dollar against the Japanese Yen
- EURJPY, the Euro against the Japanese Yen
- USDCHF, the US Dollar against the Swiss Franc
- USDCAD, the US Dollar against the Canadian Dollar
- AUDUSD, the Australian Dollar against the US Dollar
Trading strategies for dummies
A trading strategy is an action plan that a trader sets up for his trading in the financial markets he likes. These strategies are essential for any trader, whether beginner or professional, so that all his trading decisions are in line with his trading plan and money management.
For beginner traders, it can be interesting to start with day trading or swing trading.
Day Trading for dummies
As its name suggests, day trading is limited to one day, which means that a trade will necessarily be closed at the end of the trading day.
For example, a day trader will take 3 positions a day and will have objectives between 15 and 50 pips per trade.
The Japanese candle on trading charts will be from 1 minute (M1) to 15 minutes (M15).
Day trading thus limits the number of positions.
For a day trader, it is very important to take into account the economic calendar and not to be in a position when important information is announced.
Swing Trading Forex for Dummies
Swing trading is preferred by traders who do not have much time to devote to trading.
Attention, trading is a serious activity and requires long-term work.
The swing trader will have to analyze the charts only a few minutes a week.
Note that this does not mean that the trader will only spend a few minutes a week trading. A swing trader will have to spend time reading economic news and discovering the economic environment around him because the duration of his trade can last more than a day.
The Japanese candle on the daily charts is 4 hours (H4) or even 1 hour (H1) to refine the position. Thus, news will be paramount for the swing trader since the trade will be open over several days and will necessarily be subject to greater volatility in the event of major events.
What capital to start trading?
The amount of money needed as a novice trader also depends on the number of forex pairs or instruments (indices, commodities…) in which you will invest.
The more Forex pairs you trade, the more capital you will need to keep the margin required to open Forex trades.
