Guide on How to Play Forex Properly (Beginner to Advanced Tips)
Actually how to play forex there are many ways that beginners can take. Forex or Forex is the topic of an interesting topic as a way of making money and income on the Internet, because the transaction turnover on the forex market is above 4 trillion US dollars per day. And with a rotation of that size, there are many ways to get a piece of the big cake, one of which will be discussed below.
Before entering the method and how to play forex more deeply, we must first understand what Forex is?
Forex is an abbreviation of Foreign Exchange, which in Indonesian is referred to as Forex or Foreign Exchange, which is a trading transaction that utilizes currency prices against other currencies. For example: The Euro currency compared to the US Dollar is called the EUR / USD pair, the pound compared to Japan Yen is called GBP / JPY.
If the economic conditions in Europe (Euro) are better than the United States (US Dollar), the Euro will strengthen and the price movements of the currency will move higher than the US Dollar, so when you buy EURO and sell USD (Buy EUR Sell USD = Buy EUR / USD) then you can benefit from the difference in price increase from the point you bought it, and vice versa.
In addition to the ease of transacting and cake a large forex market, the forex movement is very fast, so the potential to generate profits or profits in a short time is not impossible, but so also when losers. These things make trading on the forex market more attractive than other types of investment portfolios.
Now go to the basic topics and how to play the right forex.
The term How to Play Forex can also be called Forex Trading
Below is a way and step by step that you must prepare to be able to play forex properly and correctly.
Trading tools to play forex
First of all, what needs to be prepared before you can play in forex is a set of computers or smartphones and a stable internet connection. That is the main device.
Besides that, a comfortable and hassle free trading place is also needed, because playing forex also requires concentration and should not be wrong to press the button or human error, because if there is a human error then it could lead to a silly money loss.
Forex trading at this time can be done anywhere, may be in parks, cafes, bedrooms, even in cars even using a laptop or smartphone device and a capable internet connection.
After setting up these hardware devices, it’s time to set up trading software tools, such as software with the common Metatrader platform, and this software can be downloaded at each of the forex brokerage companies you use.
After all the devices and places are ready, then you are ready to play this forex, and just learn the way more deeply.
Introduction to basic calculation methods for playing forex
In playing forex trading, it is known that the unit calculation is called the LOT volume unit. This unit is like 12 pieces = 1 dozen, 1000 kg = 1 ton, and the like.
1 Lot in the forex trading contract (contract size) means $ 100,000 (one hundred thousand dollars), and the dollar used is the USD as the base currency.
0.1 lot = $ 10000, and 0.01 lot = $ 1000
In the sense that 1 lot means the same as you transact with money of $ 100,000, so the price movement that changes 1 point (or 1 pip) will be worth $ 10
For example: the price of the EUR / USD exchange rate from the price of 1.23450 moves to 1.23482 so that means moving as much as 3.2 points.
(the number in the last line is called the Cent number, so it enters in comma units)
so if you use a transaction volume of 1 lot then 3.2 points will be worth $ 10 x 3.2 = $ 32
1 lot = worth $ 10 per point
0.1 lot = $ 1 per point
0.01 lot = $ 0.1 per point
Does it require $ 100,000 (one hundred thousand dollars) to be able to transact on the volume of 1 lot?
NO, because in Forex there is Leverage factor, which is where this makes forex play becomes more interesting again, because we can take advantage of leverage factor in this forex play even with small capital money.
Leverage or leverage that is common in forex is 1: 100, 1: 200 to 1: 400, although some reach up to more than 1: 1000, but the higher leverage will certainly be more risky, because your potential loss of money due to losses will getting bigger.
Leverage 1: 100 means that with a capital of $ 1000 you can trade up to the value of the $ 100,000 contract (1 lot)
And with the existence of this leverage factor then to transact in 1 lot volume figure then simply need $ 1000 can be done. Of course, if the greater the capital, the stronger it will be for its resilience from the position of minus floating transactions.
Training in forex trading in a Demo Account before starting actual trading
After understanding the basics of forex calculation above, then you can start a further step to play forex in real terms, but still within the limits of using demo accounts.
Because in this demo account you will not use real money, but using virtual money (money lies) that you can reset at any time if you want to repeat it, and at no charge. So that this method is very safe for testing or learning forex first.
This demo method is suitable for beginners or is used as a testing test for a trading strategy before it is applied properly in the real account.
In this account demo, it is advisable to practice and study at least within a period of at least 3 months, and if you have not been able to generate profits consistently in the period of 3 months then you are obliged to repeat again to be able to generate profits in a row in 3 months this consistently. This is important to do so when plunged into a real account then you already have a strategy that is mature and ready to use real money.
Learn how to manage risk to produce the right way to play forex
This risk management or money management is important for the key to the success of a trader in defending. And without good risk management, it is certain that it will not be able to succeed, of course this must also be balanced with mastery of qualified trading techniques
If a trading technique is good without being balanced with the correct risk management, the results will certainly be bad and cause significant losses.
If risk management is good, but trading techniques are bad, your trading account will not be able to grow to its full potential or just walk in place.
If risk management is good and balanced with good trading techniques, your trading account will definitely grow.
The right way to play forex is to be able to balance risk management and trading techniques properly.
To train risk management to support this way of playing forex, then you can apply the following steps:
- Use a demo account with virtual capital of $ 1000
- Transact with a maximum number of lots of 0.02 in each transaction (or 0.01 + 0.01)
- Apply Stop Loss (SL) settings = between 20 to 50 points, with Target Profit (TP) at the same point value as your SL
- If successfully touching the profit target with the total overall trading position is positive, then you can do the transaction again on the same day as the rules above
- If it turns out to touch stop loss with a negative trading position all on that day, then stop trading on that day and wait until the next day you trade again according to the rules above.
- Continue to do it continuously until the $ 1,000 capital is used up (may be done with arbitrary trading techniques or guessing may also be)
With the application of this method, you can see that how difficult it is to spend the $ 1000, and at the same time train your psychology in playing this forex correctly.
The above method is very suitable for training beginners in the world of trading in finding the right and best patterns for playing forex.
Once you are familiar with the risk management method, it is time to learn a trading technique for your trading account to grow.
Finding the right way to play forex is not as difficult as you imagine if you will be patient and diligent in training it. Indeed, some people think that forex is like gambling, but if we study it more deeply that forex is not gambling because it can be analyzed like business and trading in general, it has even been confirmed in the Forex explanation based on the MUI Fatwa that forex trading is not included in the realm of gambling, because trading on forex is actually the same as the forex exchange business in banking or money changers.
There are many ways to play forex, and the variations are very developed, which of course everyone has diverse thoughts. But whatever the technique and how to play it, you have to prioritize risk management factors, because that is the most important key to success being a reliable forex trader.
Apart from the ways to play forex above this, the selection of a credible forex brokerage company is also very important, remembering to maintain the security of your funds from the risk of fraud.
Congratulations on trading!