How to Trade Forex

STEP 1:

The step 1 defines certain concepts and terms of Forex Trading-

Quotes are a vital part of the foreign exchange trading, as Forex
trading is done in terms of quotes. Therefore, comprehending these
quotes is the first important step.

Firstly, in a Forex quote, the currency listed first is known as the
Base currency. For example, we have EUR/USD. Here, EUR is the Base
currency.
Secondly, the base currency has always the value 1. In other words,
the rate of other currency is calculated against 1 pt of the Base
currency. For example, we have EUR/USD where EUR is the Base currency.
Then 1 EUR = 1.2323 USD or the value of one currency against the other
in the pair.
Thirdly, when dealing in terms of quotes, prices are expressed in
terms of Pips. Pips can be defined as “percentage in points” and are
mostly the fourth decimal point i.e. 1/100th of 1%.

Also used while trading through quotes, are two significant terms
known as Bid and Ask. These two terms are responsible for making
trading quote, a two-sided quote.
Bid can be defined as ''The price at which the base currency is sold
concurrently buying the counter currency. Ask can be defined as “The
price at which the base currency can be bought concurrently selling
the counter currency''

STEP 2:

Step 2 illustrates the other key features of Forex trading which are
namely, the leverage and the Margin. These two are immensely important
in attracting the interest of the traders as they enhance the trading
power of the investors.

The leverage is the ratio of the deposited amount to the amount that
can be traded. Leverage enables the investors to deposit a small
amount of money but still trade for a much larger amount. This way,
investors can trade easily, utilizing less money to deal.

Margin, therefore, is the minimum amount required to be deposited
before an investor starts trading. This can also be known as the
initial amount with which the Forex trading account can be opened.

A detailed Example below illustrates exactly how Forex trading is done-
Supposing the current bid/ask price for EUR/USD is going by the rate
of 1.5027/30, giving you the option to buy 1 euro with 1.5030 US
dollars or sell 1 Euro for 1.5027 US dollars. Now, if you feel that
the Euro is underrated against the US dollar, you would opt on buying
Euros, selling your dollars at the same time. So you buy 100,000 euros
by paying 150,300 dollars. You can then start analyzing the market,
waiting for the exchange rates to rise.
As predicted, the rates begin to rise and then you decide a favorable
rate at which you plan to sell your Euros to get a hefty profit.
Supposing the Euro rises to 1.5090/93. Now, to realize your profits,
you sell 100,000 euros at the current rate of 1.5090, and receive
$150,900.
You bought 100k Euros at 1.5030, paying $150,300. You sold 100k Euros
at 1.5090, receiving $150900. That's a difference of $600 or in other
words, you successfully earned a profit of $600.
Return on Investment = $600

Always learn a lesson from the Forex Indicators, keep a watch, think
long term and then take a step.

STEP 3:

MarketForex does e-trading using high end MarketForex softwares.
Easily accessible and user friendly, they have a simple operating
process. For instance, the currency pair to be bought or sold can
simply be dealt with, by clicking on the sell or the buy key, placed
in front of that currency.
After the deal to be done is selected, a quote is then displayed by
the software, making it easier for the user to keep track of the
records. Also, MarketForex software provides some attractive powerful
features such as account details of the holder, like balance, leverage
and margins, along with stop/limit orders.
The trader also has the option of selecting various other currency
pairs for trading purposes. Before investing always analyse the forex
market with various types of forex analysis.