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The Forex [FX] market is a global market where two currencies can be traded against each other. You have essentially participated in the FX market if you have ever visited a money changer to exchange the money in your wallet into a different currency. The FX market has a daily trading volume of $5 trillion on average.
To put things in context, the New York Stock Exchange is valued at over $20 billion. In addition, the Forex market operates 24 hours a day, five days a week. It is now more easy to trade Forex. You only need a laptop and a brokerage account to begin trading. Of course, don’t just start trading without first understanding how to trade properly; you’ll end up losing a lot of money.
This is a step-by-step guide on how forex South Africa works given by JustForex:
The first step is to select a currency pair. You are always exchanging or trading the value of one currency for another in forex. That is to say, you buy one currency while simultaneously selling another. That implies you’ll be trading in pairs, such as gold and silver. RM/USD. New traders typically begin by trading the most regularly available pairs of major currencies, but this is not a requirement.
Second, you must research and conduct a thorough analysis of the market, which is comparable to stock trading. These are two methods that form the foundation of trading. Remember that acting on emotion is never a good idea.
To avoid becoming overwhelmed by all of the different currencies – and there are a lot of them – focus your research on a certain currency pair and gather useful materials for the two. Examine current and historical charts on a regular basis, as well as monitor the news for economic announcements, and undertake other technical and fundamental analyses.
The next step is to comprehend the quote. Because you’ll be trading two currencies, you’ll notice two values for each currency. The spread is the difference between the first and second rates. The difference is the fee a dealer charges for completing the transaction. Spreads, on the other hand, differ depending on the dealer.
Finally, is it better to acquire or sell a position? When you take a buy position, you’re betting that the value of the base currency will rise against the quote currency. If you buy MYR/USD, you are betting that the Ringgit will appreciate versus the dollar.