How to play forex effectively is one of the topics that receive a lot of attention from many investors. Operate trades to profit from the price difference of currency pairs in general. This is considered a stable and long-term investment trend that is being chosen by many people. However, to achieve the desired profit and limit the risk of capital, Traders need to learn how to play Forex effectively. We will provide some information related to this issue for everyone’s reference.
How to play Forex effectively for beginners
Step 1- Open an account
Currently, on the market, there are many reputable forex brokers, each with different characteristics. And investors need to find out which broker best suits their style. Then proceed to open an account to start linking with the global investment market, ensuring that transactions are always safe, transparent but equally exciting.
Normally, for those who are new to the market, consider choosing a Demo account to practice trading before playing real Forex with your capital. Once you have enough experience and confidence, you can start trading for real by signing up for a Standard account.
Step 2- Deposit money into your account
Existing forex trading floors all support many top-up ports such as Internet Banking, domestic ATMs, credit cards – debit cards, electronic wallets, etc. Investors can choose the top-up method. match and deposit an amount to conduct the transaction. However, the minimum margin needs to comply with the regulations of the exchange.
Step 3- Choose a currency pair to trade
This is an important step, it affects how to play Forex effectively or not. The names of the currency pairs on the exchange are written in symbols, most of which are created by combining the first 2 letters representing the country’s name plus a third letter representing the name of the country’s currency. that family. For example, USD – US Dollar, JPY – Japanese Yen, GBP – British Pound, etc.
Currency in Forex will be traded in pairs, this means that the player is performing 2 operations simultaneously – buying 1 foreign currency and selling 1 foreign currency in the same pair.
Step 4- Make the right BUY or SELL decision at the right time
As we mentioned above, a currency pair will consist of 2 currencies playing different roles. While the first currency will act as the base currency, having the unit of one, the second currency will act as the quote currency. At this time, investors should consider the appropriate order to be able to optimize the profit source.
– Put on BUY: the base currency will increase against the quote currency or the quote currency is trending down against the base currency. In general, investors should place a buy order when the value of the base currency is greater than the value of the quote currency. If the price increases then the Trader’s profit increases accordingly. If you close the order when the price is higher than the current entry-level, you will receive a profit. In the case of closing the order when the price drops compared to the entry price, the trader is likely to lose.
– Place a SELL order: when the Trader predicts that the base currency will decrease against the quote currency or the quote currency will increase against the base currency. If the price falls below the entry-level, your profit will increase and be profitable, and if the price rises above the opening level, then the investor will lose the order, which is a loss.
– Place a SELL order: when the Trader predicts that the base currency will decrease against the quote currency or the quote currency will increase against the base currency. If the price falls below the entry-level, your profit will increase and be profitable, and if the price rises above the opening level, then the investor will lose the order, which is a loss.
Step 5- Follow up and close the deal
Based on the market price movement, the trade will start to calculate the profit-loss level. When the order is open, the Trader needs to spend time observing the market to change accordingly. At the same time, investors should also consider how to take profits and cut losses accordingly. This is considered an effective way to play Forex.
Step 6- Close the transaction and take profit
Traders can close the trade in two ways: automatically take profit, cut loss to close the trade or the second way is to actively close the trade when necessary. The trader’s profit or loss amount will be charged to the account immediately after closing.
Building mindset when trading
When choosing the path to become a Trader, Traders will have to face many new elements of this profession. Traders must be aware that, trading in financial markets, make a profit from this activity. It’s never been easy. That means, Traders need to build the right mindset when trading. Understanding the financial markets is not the way to get rich quickly. At the same time, no method guarantees 100% winning when accepting investments in the financial markets.
Therefore, to have an effective way of playing Forex, a Trader must have a specific, tight trading plan. Especially be patient, and stick to the plan that you have researched even though the market has many fluctuations.