Learn Forex & CFDTrading - Step by Step

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However, the practice often looks quite different, especially for beginners who have not dealt with the matter. Learning Forex trading is a very crucial element for having any chance at all in the further course to continuously - at least on balance - make profits with Forex trading. Therefore, we would like to give you as much information as possible about what learning Forex trading consists of, how to proceed and what you should know before you have the first trading order executed with your money.

The most important terms in forex trading explained simply

One of the basic requirements when learning forex trading is that you are familiar with the customs of forex trading and, most importantly, that you know the most important technical terms. You will hear these over and over again and be confronted with the technical terms, so it is important to know at least the most common technical terms and their meaning.

Leverage

One of the most important terms related to Forex trading is leverage. It is only because of this leverage that savers and small investors, among others, can participate in forex trading. The leverage represents the capital that the respective broker lends you. The usual leverage ranges from 50:1 to 400:1, so a leverage of 400:1 would mean that the CFD broker lends you 400 times your own capital. By the way, this also results in the margin, which is exactly 0.25% with a leverage of 400:1.

Margin

The margin can be translated as security deposit and is closely related to the previously described leverage. Although the broker lends you a multiple of your own capital investment, he still requires a small security deposit, namely the margin. How high the respective margin is, depends on the broker and of course also on which leverage is used. For example, if the broker provides you with 200 times your own capital investment, i.e. a leverage of 200:1 is used, the margin amounts to 0.5 percent, based on the traded equivalent value.

Margin Call

Margin is used to cover open positions with at least a small amount of capital. Whenever the available margin is no longer sufficient, some brokers initiate a so-called margin call. This is a warning notice that is intended to inform you as an investor that your security deposit is no longer sufficient. It usually pop up in your trading terminal on the selected language. On different languages it sounds differently. For example in Thai it would be - "คําเตือน. ในระดับ โบรกเกอร์ Exness ของคุณมีความสําคัญ". You must then either provide further margin, i.e. deposit additional money into the trading account, or in many cases the broker will automatically close the open position in the event of further price declines.

Lot

The lot defines a common trading size, as it is realistic in Forex trading. A so-called standard lot corresponds to 100,000 units of the respective currency, for example 100,000 Swiss francs. A mini-lot is when 10,000 units are involved, while a micro-lot is when 1,000 currency units are involved. Almost every broker specifies in its terms and conditions the minimum lot size that must be traded. For example, if it is the standard lot, at least 100,000 units of the respective currency must be traded - taking into account the leverage, of course.

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Pip

A pip is the smallest possible price change that can occur in a currency pair. Depending on the currency pair, the pip usually refers to either the third, fourth or fifth decimal place. For example, if the exchange rate of the U.S. dollar against the euro is currently 1.0567 dollars, a change of one pip would be equivalent to the new exchange rate of 1.0568 dollars.

RIKEN TECHNOS CORPORATION
RIKEN TECHNOS CORPORATION
 THAI PLASTIC AND  CHEMICALS PUBLIC CO.,LTD
THAI PLASTIC AND  CHEMICALS PUBLIC CO.,LTD
MITSUI & CO.,LTD.
MITSUI & CO.,LTD.
MITSIAM INTERNATIONAL LIMITED
MITSIAM INTERNATIONAL LIMITED
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