How to invest your hard earned money in Indian FOREX exchange…? Find the answer.
Trading forex in the currency market, also called forex market is a double edged sword. It can be pursued as a hobby and in the process help you to earn some quick bucks. An interesting piece of statistics is that the forex market trades about $ 5 tri million each day. Forex trading online can be done in a number of ways. To get the ball rolling and earn some decent amount of money, you would need to be aware of a few fundamentals.
Being aware of the Forex terminologies
The type of currency that you are trying to get rid of is base currency and the one that you are purchasing is quote currency. In the forex market you can sell one currency to another person. A short price depicts a situation where you would be buying quote currency and then selling base currency.
Go through a Forex quote
Two numbers will be appearing on a forex quote. The ask price on the right followed by the bid price on the left.
Deciding which is the currency that you would need to Buy and Sell
- You would need to make certain predictions about the economy- If you are of the opinion that US dollar is about to weaken, then you would want to sell the currency and look at buying other currency from a different country where the economy is on the stronger side
- Consider the trading position of the country. Look whether has demand for a host of goods in the market and then they are likely to export more to earn some money. This advantage in trading is likely to boost the economy of the country and in the process the value of the currency is bound to increase
- Do consider the politics of the country. If a country has an election round the corner, the currency is going to appreciate if the coming government has a responsible fiscal agenda. On the other side of the coin, if the economy of a country loosens legislations in terms of economic growth, the value of the currency is likely to fall big time.
Be aware on how to Calculate Profits
The pip is the term that measures the value between two currencies. One pip equates to 0.0001 value of a currency. You would need to multiply the number of times that your pip account has changed and this will show how much your account value has increased or decreased in terms of value as well.
Undertake research about different brokerages
You should look at some who has a reasonable amount of experience in this line of business. He is aware of what to expect from the market and how the clients need to be handled as well. Then check in to see whether the brokerage is regulated by a major regulatory body. If your brokerage is under some government authority, you will have a sense of security.
Analyse the Market
You would need to plan a technical analysis that would mean reviewing of historical data. When it comes to fundamental details, it would mean fear understanding of the structure of the economy of the country. Last but not the least you could look at sentiment analysis that works out to be subjective in nature.