Forex is the trading of international currencies. Trading forex is very similar to trading stocks on the stock market, however instead of buying or selling shares of a company one currency is purchased with another. Money is made when the purchased currency increases in value relative to the currency used to purchase it. Currencies are traded in pairs, and only certain pairs are available. At Accendo Markets, we provide the support and educational material to enable you to learn how to trade forex.

The forex market is the most liquid and the largest market in the world. The main participants in the forex market at central banks and commercial banks. However, private investors, as well as pension funds and insurance companies can also trade. Online trading, using platforms like those offered by Accendo Markets, has made these markets extremely accessible to private investors and enabled many to learn how to trade forex. These platforms have helped to reduce the costs associated with trading, and encourage the fast paced market currently in existence.

When looking at how to trade forex, an investor must first determine whether they are long or short for the currency. In Forex trading, long means you are purchasing the base currency and selling the quote currency. A short position means you are selling the base currency and purchasing the quote currency. When deciding how to trade forex, you also need to determine what price you want to buy or sell at. The bid is the price you are able to buy the base currency at, while the ask is the price at which you can sell the base currency for. The ask is also sometimes referred to as the offer price. The difference between the Ask and the Bid is called the spread. Sometimes, a single “pip” (unit of movement) is the entire spread between the currency’s bid and ask. Forex is usually (but not always) quoted with four decimal points. So, if you are looking at the fourth decimal point, this is the fourth pip.  Because the market is so fast moving and based on such particular numbers, it is especially important to understand trading strategies and order types.

If you’re still discovering how to trade forex and would like some help, forex trading signals are available. You can try the forex trading signals on a two-week trial basis.

There are many strategies to follow if trading forex, as well as many types of trades and orders. A market order, for example, is placed when you want to buy or sell at the best available price. A Limit entry order is placed to purchase below the market or sell above the markets. A stop entry order is opposite this, and placed an order to buy above the market or sell below the market. A stop entry order, for example, might be used when you believe the market will move in a particular direction, and you want to trade on momentum. A sophisticated investor, who knows how to trade forex, will be able to utilize these trades to protect against loss.

Many forex strategies consider the macro economic trends occurring between two countries. General trends are likely to impact the valuation of a currency, for example.  Specific forex strategies, however, are typically very specific. Many strategies consider the moving averages and crossover points. Bollinger bands, breakouts, and stochastic charts can all be used to determine the likelihood of a currency appreciating or depreciation, and therefor you making money on it. If you are interested in learning more about how to trade forex, these strategies and more are clarified in Accendo Markets’ in-depth forex reports.