The Currency Trading Basics You Should Know

Ali Qamar

Updated: 16 November 2023

Service for copy trading. Our Algo automatically opens and closes trades.

The L2T Algo provides highly profitable signals with minimal risk.

24/7 cryptocurrency trading. While you sleep, we trade.

10 minute setup with substantial advantages. The manual is provided with the purchase.

79% Success rate. Our outcomes will excite you.

Up to 70 trades per month. There are more than 5 pairs available.

Monthly subscriptions begin at £58.

L2T Algo

RESULTS

The Basics Of Currency Trading

Our Forex Signals

Forex Signals – 1 Month

Up to 5 Signals Sent Daily
76% Success Rate
Entry, Take Profit & Stop Loss
Amount to Risk Per Trade
Risk Reward Ratio
VIP Telegram Group

39£

Buy now

Forex Signals – 3 Months

Up to 5 Signals Sent Daily
76% Success Rate
Entry, Take Profit & Stop Loss
Amount to Risk Per Trade
Risk Reward Ratio
VIP Telegram Group

89£

Buy now

MOST POPULAR

Forex Signals – 6 Months

Up to 5 Signals Sent Daily
76% Success Rate
Entry, Take Profit & Stop Loss
Amount to Risk Per Trade
Risk Reward Ratio
VIP Telegram Group

129£

Buy now

Currency trading is on a gripping ride with no signs of stopping soon. But how much do you about currency trading? Perhaps, you might have heard about it or even considering to start trading. Therefore to ensure that you don’t get yourself into a world of the dark with your money, here are the basics you should know.

What’s Currency Trading?

Forex trading is arguably the most significant investment market across the globe and still growing. It’s the buying and selling of currencies. Formerly, professional traders and institutions dominated the market, but now with more currency platforms, retail traders also have their chances in the market.

How Currency Trading Works

The markets work 24 hours except that they close only from Friday evening until Sunday evening. Currency trading includes three sessions that include Asian, European, and the US. The currencies in the various markets trade during their market hours. For instance, traders with pairs on the dollar find their volume in the US trading session.

Trading is done in different sized lots, and the micro-lot is merely 1,000 units of a currency. It means that if you fund your account in US dollars, then a micro lot will represent $1,000 of the base currency. There’s also a mini which is 10,000 units and a standard lot at 100,000 units.

Traded Products

When compared with stocks, currency trading has far fewer products. The forex market has only 18 currency pairs; however, there’re several other pairs included. The most currencies traded in the forex market include;

USD (dollar)
EUR (euro)
The CAD (Canadian dollar)
NZD (New Zealand dollar)
Swiss franc (CHF)
GBP (British pound)
JPY (Japanese yen)
AUD (Australian dollar)

Fewer trading products, however, can make trading as well as portfolio management a bit a more straightforward task – but not really the general forex trading.

Pips and Pairs

While trading currency, unlike the stock market where a single stock can be sold, trading gets done in pairs. All the currencies are priced to the fourth decimal point.

A pip is the smallest increment of trade, and it typically represents 1/100 of 1%. Trading in micro-lots makes losses a bit easier to manage when a trade is not producing intended results.

Things that Move Currency

Most forces that drive the stock markets also are behind moving the currency market. It’s the main reason as to why stock traders make interest in both worlds.

The most significant force is supply and demand. When the dollar is much in demand, its value increases, and when a lot of them are in circulation, its price drops.

The other factors that move the currency markets include such like the interest rates, political stability of a nation, and the new economic data from largest countries.

AvaTrade - Established Broker With Commission-Free Trades

Our Rating

Minimum deposit of just 250 USD to get lifetime access to all the VIP channels
Awarded Best Global MT4 Forex Broker
Pay 0% on all CFD instruments
Thousands of CFD assets to trade
Leverage facilities available
Instantly deposit funds with a debit/credit card

Get Lifetime Access

71% of retail investor accounts lose money when trading CFDs with this provider.

The Bottom Line

Trading forex cannot be suitable for every individual because it involves considering a lot of risk appetite as well as the investment levels. Getting a winning experience in forex trading marks the beginning of profits; unfortunately, it requires a lot of experience. Nevertheless, for a start, a bit of the basic in forex trading is essential in your forex trading journey.

The Currency Trading Basics You Should Know

Ali Qamar

Join our Telegram Channels