What will you learn?
Watch out for events
Support and resistance levels/lines
Writing a journal
Keeping your goals in mind
The most important thing to understand about Online Trading is that currencies are always traded in pairs. Let’s take the EUR/USD pair for example. The currency on the left is known as “the base” while the currency on the right is known as “the counter.” Globally, there are more than 100 currency pairs that can be traded. The currency market is the largest in the world with a lot of money changing hands daily.
To successfully trade in the Online Trading market, it is important to understand the events that matter the most to the exchange rate of a currency. A variety of factors play a role in determining the exchange rate; such as, interest and inflation rates, political upheavals and economic health. Including macroeconomic data such as the rising of interest rates by central banks or the unemployment rate of a country or political conflicts within the country. In contrast, microeconomic data such as quarterly earnings reports do not affect the market as such. The main approaches to analyzing the movements in the Online Trading market are fundamental and technical analysis.
In Online Trading, leverage allows traders to perform transactions with larger sums of money than they have in their account. This generates significantly higher returns because it magnifies gains. MarktesOnline gives its traders competitive spread rates to trade with leverage.
Leverage is expressed as a ratio and determines the minimum margin. For example, with a 50:1 leverage ratio, you only need to have 2% of the total value of an intended trade available on your account. This is calculated as 1 divided by 50, which is equal to 0.02 or 2%.
The trick is to understand that leverage is also a double-edged sword. This is because, while leverage substantially increases the ability of traders to generate profits, it can also work against traders. For example, if a currency pair moves in a direction different than you speculated, leverage can amplify potential losses.
This underlines the need for traders to thoroughly understand the Online Trading market before committing to a trade. It helps you learn whether it is worthwhile to leverage your transactions and by how much. The option is always available, but it is also risky.
One of the most appealing features of trading in the Online Trading market is that it is open 24 hours a day, allowing traders to access the financial market during normal business hours, after work and even in the middle of the night. This is made possible because the market is divided into the European, Asian and North American trading sessions.
For example, after a weekend passes, activity in the Asian markets starts when the Tokyo capital markets become live. The Asian markets run from 11pm to 8am GMT. Later in the day, just as the Asian markets are about to close, the European session takes over from 7am to 4pm GMT. This overlaps with the North American session, which opens from noon to 8pm GMT.
For traders, the nature of the global currency market enables them to respond to breaking news related to the currency market as it occurs to maximise profits. Online Trading is, therefore, an exciting and fast-paced avenue to generate significant returns, as well as become part of a global financial venture.