When someone wants to make money on the Forex market, he or she comes across some concepts and definitions. At first, all this seems confusing. Learning new information can be much time- and energy-consuming.
I want to help you cut the way of trials and errors short. So, I wrote a brief guide to the Forex trading basics and tricks, which a newbie will come across at the very beginning. The success of this way mainly depends on the first step. The most important is to take a step in the right direction.
So, you have registered a personal profile on the LiteFinance website, pressed on many different buttons, and became a virtual millionaire. To start real trading, you need to choose the type of your real trading account.
The forex broker offers two trading account types. The ECN (Electronic Communication Network) account is usually recommended for professional traders. The Classic one is suitable for all investors.
Both types are real trading accounts forex, which enables you to trade in the foreign exchange market. There are not so many differences between them. However, the ECN account allows a trader to use the copy trading service, which provides extra profits from copying successful traders’ trading behavior.
Once you select the account type, you need to define the leverage size. It can be from 1 to 500. Which leverage ratio will suit you depends on your trading style. So, I do not recommend you to make hasty decisions and think it over thoroughly.
The LiteFinance company offers several options for the leverage amount, varying from 1 to 500. However, you need to understand what financial leverage is before you make your choice. I’ll try to explain it in simple terms. Leverage is the funds you borrow from the Forex broker to increase your potential return.
It is like a bank loan, but you do not need to submit any additional documents, and it is interest-free. You can choose the leverage ratio, where 1 (1:1) will mean you do not take any money from the broker. A 500 leverage (1:500) means that your own funds on the account are multiplied by 500.
Example. I have my own deposit of 1000 USD. If I use 1:1 leverage, I can operate only with my own money. If I use leverage 1:500, I can already enter a trade of 500,000 USD!
I want to warn you to be cautious. With great money comes great responsibility. If you use the maximum leverage, you can lose all your deposit if the price makes the slightest swing in an unfavorable direction.
Experienced traders usually have Forex leverage ranging between 1:30 до 1:200, the standard leverage is 1:100. The leverage of 1:100 is so popular because it is convenient. You can quickly calculate your own funds needed as a margin to open and maintain a position.
So, you have selected the trading account type and the Forex leverage size. Now you need to choose the equipment to buy and sell currencies.
In the past, when the technology was not as developed as it is now, traders made transactions on the phone. In earlier times, they used the telegraph. But now we have the Internet and various trading terminals, including mobile versions and the trader's personal profile. Continue reading on LiteFinance.