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Haven’t had experience in financial transactions? We will guide you step by step to start trading.
The foreign exchange market is the largest financial market in the world, with a daily trading volume of up to 5 trillion US dollars. As the main currency exchange mechanism, the foreign exchange market does not only provides basic services for global commerce and trade. Such a huge transaction volume also provides various trading opportunities for those who want to invest in the foreign exchange market. Forex traders can buy or sell different currencies five days a week, 24 hours a day, and use leverage (increasing nominal trading volume) to speculate on global currency flows and market fluctuations.
The foreign exchange market is usually referred to as “foreign exchange” or “FX”. It is a global, decentralized, over-the-counter currency trading financial market.
Global Market
– Global economic and political events drive these markets, which in turn affects the relative value of the currencies of these countries.
Decentralized market
– Decentralized market means that the foreign exchange market is different from the traditional stock market in that it does not have a centralized exchange.
– Instead, financial centers around the world have formed a large 24-hour trading network that brings together different types of buyers and sellers, and the market is closed only on weekends.
Over-the-counter transactions
– The foreign exchange market is not controlled by any central regulatory agency, and there is no clearing agency to guarantee transactions.
– Brokers and traders negotiate transactions with each other directly through the electronic network
– This kind of market in which traders negotiate prices with each other is called “over-the-counter trading.
Trading foreign exchange
For active traders, the foreign exchange market is not much different from other trading markets (such as stocks, commodities or fixed income markets). The foreign exchange market is also a place for buyers and sellers to trade, but the vehicles bought and sold are currency pairs. The currency pair may be the EUR to USD, USD to JPY, GBP to USD, EUR to GBP, or a combination of many other currencies.
Different currency combinations represent the value of one currency against another, and this relationship is expressed by a price. In the foreign exchange market, combined with the economic and political status and expectations of the two countries, the price of a currency pair is actually the expected market value of one currency measured in another currency. From the perspective of stocks, the price mechanism of currency pairs is similar to stock prices.
Compared with other markets
The daily trading volume of the stock market is about few billions of US dollars, while the daily trading volume of the foreign exchange market is as high as 5 trillion US dollars. Participants in the foreign exchange market include central banks, hedge funds and other financial institutions, global companies and individual investors. Most foreign exchange transactions are the result of currency exchange involved in daily global trade. The huge daily trading volume of the foreign exchange market provides endless trading opportunities, while also allowing traders to make more diversified investments through the global foreign exchange market.
What factors play a key role in foreign exchange transactions? How does it compare to stocks? Let us illustrate with an example. Suppose a country’s inflation rate or bank interest rate is both low and stable, its economic output is growing strongly and its political environment is very stable. One can expect that the currency of this country compares to another country whose fundamentals are not so good will be relatively strong.
Let’s take another example of stocks for comparison. Assuming domestic and global economic performance is strong, while inflation is not that serious. Additionally market competition has not weakened the company’s product’s market share, product demand is stable, and worker production efficiency is high, then you can expect that the company is stock price will remain strong compare to those companies with situation not as good.
Similar to stocks, the short-term trend of foreign exchange currency pairs will be affected by some other factors, including technical analysis, short-term supply and demand, seasonal capital flow patterns, current prices, etc. These factors are generally in dynamic changes.
Step 1: Apply for a real account
We offer to trade a variety of global financial products. You only need to fill in and submit an account opening application form online, and upload the required documents, we will review your application in the shortest possible time and email you the transaction account information.
Step 2: Deposit funds
After your real account is successfully opened, you can deposit funds to start the first transaction. Depositing funds is very convenient, just log in to the customer portal to operate. In the website, you can choose to deposit funds using electronic wallets such as credit/debit cards and bank wire transfers. After the deposited funds are in your account, you are ready to start your first transaction.
Step 3: Start trading
Now that your trading account has been successfully opened and the funds has been successfully deposited, you are ready to start your first transaction. The following points are some things you need to pay attention to before you start trading. Please remember: Do not trade when you are not sure, every new trade implies a new risk, please make sure that you are fully prepared before clicking to open a position.
1.Understand the market Know what you want to trade and when to trade.
2.Understand the operation of the trading platform Before making the first transaction,you need to be familiar with the operation of the trading platform.
3.Start your transaction After you are familiar with the operation of the platform,you can start your first transaction.
Remember that the major players in the market contribute most of the liquidity in the market. At the same time, what causes price fluctuations and evolves into market trends is the flow of funds from one currency to another. The actual capital flow may be related to real speculative demand, such as hedging by customers for wealth protection purposes, or the need to purchase assets. However, people’s expectations also account for a large part of the reason, that is, the market Expectations of changes in capital flows.
News or events that may trigger market volatility
– Gross Domestic Product GDP
– Interest Rate
– Employment / Unemployment Status
– Trade Surplus / Deficit
– Force Majeure Events
Non-farm payroll and unemployment Rate
Economic Calendar
So, how can we keep an eye on these potential market drivers? Although we can’t predict the world, we can use the economic calendar to monitor which important news releases will take place in the coming days, weeks or months.
The economic calendar lists the news and events that are publicly released in a particular country, which means that people all over the world can get the same news at the same time. Although this is a major benefit for retail traders like us, it’s best to realize that banks also have a major advantage: i.e. they can see where the money is going (and where it comes from) by seeing the flow of orders from customers.
Trading foreign exchange
For active traders, the foreign exchange market is not much different from other trading markets (such as stocks, commodities or fixed income markets). The foreign exchange market is also a place for buyers and sellers to trade, but the vehicles bought and sold are currency pairs. The currency pair may be the EUR to USD, USD to JPY, GBP to USD, EUR to GBP, or a combination of many other currencies.
Different currency combinations represent the value of one currency against another, and this relationship is expressed by a price. In the foreign exchange market, combined with the economic and political status and expectations of the two countries, the price of a currency pair is actually the expected market value of one currency measured in another currency. From the perspective of stocks, the price mechanism of currency pairs is similar to stock prices.
Market sentiment
Market sentiment can be used by both long-term and short-term traders. For long-term traders, they are more tend to observe the trend of data over several weeks or months and compare it with the price of the relevant currency pair.
News trading
News trading is a very popular way of foreign exchange trading. This part of traders focuses on trading before and after the news release. As mentioned above, real data that deviates from market expectations will cause greater market volatility.
Avoid news trading
This is the third trading method, that is, use the same filter to filter out high-influential news and make sure to avoid these news periods to trade. This method is more suitable for traders (or ultra-long-term traders) who use 1-hour, 4-hour or daily charts to set up trading strategies.
1. Check “Yes, I agree with all the terms of this license agreement” and then press the “Next” button. If you need to specify the installation path of the MT4 platform, click the “Settings” button.
2. The installation wizard will automatically connect to the MetaQuotes website and start downloading platform content. When the download progress bar is complete, click the “Finish” button.
3. The platform interface will automatically open, indicating that the MT4 platform has been successfully installed. If you encounter any problems during the installation process, please contact the online customer service or call the toll-free number to contact the customer service team.
4. Log in to the trading account. If you already have a trading account, please click “File” on the top left of the platform-“Log in to trading account.
5. In the pop-up login window, enter the account number and password, choose the correct server, and then click the “Login” button.
The platform will take some time to log in to the account. You can check the bottom right corner of the platform to confirm whether the connection is successful. When the platform is successfully logged in, the data traffic should be displayed in the lower right corner.
6. Create a market order
There are many ways to open a new transaction on the MT4 platform. The easiest operation is to directly click the “New Order” shortcut button on the toolbar at the top of the platform, and then an order window will appear.
7. Product category: Choose your trading targets
Economic Calendar
So, how can we keep an eye on these potential market drivers? Although we can’t predict the world, we can use the economic calendar to monitor which important news releases will take place in the coming days, weeks or months.
The economic calendar lists the news and events that are publicly released in a particular country, which means that people all over the world can get the same news at the same time. Although this is a major benefit for retail traders like us, it’s best to realize that banks also have a major advantage: i.e. they can see where the money is going (and where it comes from) by seeing the flow of orders from customers.
8. Pending order
9. One-click trading
Foreign exchange prices fluctuate rapidly, sometimes we have to find a faster and more efficient way to place orders. Fortunately, MT4 provides one-click trading functions. Right click with your mouse in the chart window on the right side of the platform and select “One Click Trading” in the menu options.
On the upper left corner of the chart, there will be a one-click trading quote floating window. Left click on the price to automatically open a sell position, and then right click on the price to automatically open a buy position. Before clicking, be sure to enter the number of lots to be traded in the middle trading volume column.
10. Modify the order
After opening a position, sometimes we need to set a stop loss/profit for the position. In the “Trade” column of the “Summary” window at the bottom of the platform, find the position that needs to be modified, right-click on it, and select “Modify or Delete Order” from the menu.
In the pop-up window, follow the settings in the figure below to change the stop loss/take profit of the position.
11. Close position
the “Summary” window at the bottom of the platform:
The account balance, net value, used margin (occupied margin), and available margin are also displayed in the window and used margin ratio (used margin ratio = equity/used margin). Now we close this transaction, right-click on the order and select “Close Position”.
At this time, we opened the closed trade confirmation window and clicked on the yellow button in the window to close this trade and realize profit for the position.
One-click closing: Click the X button on the far right hand side of the position to activate one-click trading, which can complete the closing operation more quickly.
12. Account history
13. Open the chart and load the technical indicators
Leverage and margin (margin is also called “prepayment” on the MT4 platform) are like two sides of a coin, they actually refer to the same concept. Here we use an example to illustrate how leverage and margin play a role in trading.
Assuming that a 1 lot USD/JPY position is established, the value of the position is 100,000 USD:
When the leverage ratio is 1:1, the margin occupied by the position is USD 100,000. In other words, you need to prepare at least $100,000 to open an equal position (the stock market is a market with a leverage ratio of 1:1).
When the leverage ratio is 1:400, the margin occupied by the position is 100,000 / 400 = USD 250. In other words, with a leverage of 400 times, you can open a position worth $100,000 with just $250 as a margin.
Contract for difference “CFD” as a derivative investment tool allows investors to trade the price changes of various financial assets such as stock indexes and commodity futures. By trading CFDs, investors can conveniently speculate in different financial markets without actually holding the underlying assets of the relevant market. Because it can easily meet the needs of diversified investment and global investment, CFD trading has become more and more popular.
Explore the CFD market
What are the different types of underlying assets of CFDs?
A stock index is a financial asset that represents the value of a specific part of the stock in the stock market. For example, one of the most popular stock indexes, the Standard & Poors 500, represents the overall performance of the leading 500 companies publicly traded on the US stock market. If you trade the S&P 500 CFDs through WCG, you can decide whether to open a buy or sell position by speculating whether the index will rise or fall. WCG also provides CFD trading on other famous stock indexes, including the UK FTSE Index (UK100), the US Dow Jones 30 Index (US30), the US Nasdaq 100 Index (NAS100), the French CAC 40 Index (FRA40), and Europe Stoxx 50 Index (ESTX50), German DAX Index (GER30), Nikkei 225 Index (JPN225) and Australia ASX 200 Index (AUS200).
Commodity futures are also a kind of financial asset. It represents an agreement to buy or sell a said amount of a certain commodity, such as platinum, copper or crude oil at a predetermined date and price. Since the prices of commodities always fluctuate with changes in supply and demand, traders can speculate on their price fluctuations by buying and selling commodity futures. If you trade platinum CFDs through WCG, you can predict whether the price of platinum will rise or fall in the future and decide whether to open a buy or sell order. The commodity CFDs provided by WCG also include copper and crude oil (Texas light crude oil WTI and BRENT crude oil).
By opening an account through WCG, you can trade foreign exchange and stock index or commodity CFDs on the same platform and account. You will be able to freely swift between the foreign exchange market and different CFD markets, open and close positions accurately.
What are the advantages of CFD trading?
The most significant advantage of trading CFDs is that you can use up to 100 times leverage, which means you can open larger transactions with lower starting capital and relatively small transaction costs. It should be noted that although leverage can magnify profits, it will also magnify losses. Therefore, you need to adopt appropriate risk management strategies when trading CFDs with leverage. CFDs also support two-ways trading, whether it is a bear market or a bull market, you can buy and sell freely, and the whole process you will not be charged any commission or financing fees. Trade all products on one account and take full advantage of the multiple trading opportunities that WCG provides you.
