General Discussions

Lesson No 8

Till now we have learned some basics of forex trading like, introduction to forex trading, how to open account, what is MT4 and its interface and how to start first trade.  So friends I hope till now you have got enough information about forex trading and I hope that now you will be in a position to at least open your demo account and start playing and doing experiences with your demo account.

Friends remember, Forex Trading is not a game to make you millionaire over the night but it is a game of patience and hard work.  If you will lose temper and patience at an early stage of your forex trading then believe me you will lost your money and will bear a lot of loss to your capital.  You must, very keenly watch the market trends and then set  your profit and loss limits and place your order, after placing order wait for market trends so that it may hit your profit limit and you will gain profit.  It can take few hours or even few days or weeks to hit your profit limit if you will lose your temper in early stage you will not meet your target and will lost your capital.

You can watch videos on youtube channel to have general idea about forex trading.

How to Start your first trade?

Lesson No 7

Today we will learn how to make our first trade.  Friends please remember that before starting trade you must have some knowledge about the market, you must analyze or even you can use any signal providers service to asses the trends of the market.  But for now I am not discussing any technique or skills how to made a successful trade but I am going to just tell you how you can made your first trade irrespective of whether you earn a profit of got a loss.

So, you can double click on any currency pair to see an order window, there you will be shown two different prices i.e sell price and buy price with two buttons sell and buy in red and blue lines.  On the left side of that window you see a graph with two lines red and blue these lines are accordingly to the sell and buy buttons.  The difference between these two lines and prices is called spread.  Which means that if you are going to buy a currency with a price of 1.05256 $ when you will sell it broker will buy it with a price of 1.05250 which means a spread of 6 pips.  This is brokers commission.  In daily life you can examine that when we go to sell dollars to the currency exchanger he will buy it on higher rate and when you will buy it from him he will sell it on lower rate, this difference of buy and sell is called spread and commission in forex trading.

There you can see few options like you can select any currency pair from this order window.  You can see different options of order window as shown in the image below.  You can select currency pair, volume of your trade your order type instant execution or pending order. Take profit, stop loss, deviations and buy and sell options.

You can insert any comments in comment box for identification of your order in trade tab.

Here we will discuss instant execution first, as it is easy to understand and at very early stage you must learn about instant execution first.  Now if you asses that price will go down, you must select take profit limit below the blue graph line for instance you can select any value below 1.0048, it may be 1.0040 or any value below 1.0048, then press sell, it means that you are going to buy a pair at your selected price i.e 1.0040 and you will sell it at current buy price that is 1.0051.  It means that when your buy price i.e 1.0051 will hit the price 1.0041 your trade will automatically execute and close with a profit of 8 pips i.e difference between your buying and selling price i.e 1.0051-1.0051 = 10 pips.  In this case if your volume was 1 then you will earn 10 dollars for profit of 8 pips, and if your volume was 0.10 the your profit will be 0.10 dollar and if your volume was 0.01 which is the lowest volume lot then your profit will be 0.01 dollars.  If the volume of your trade will be higher your profit will be higher and if the volume will be lesser your profit will be lesser.

This was instant execution with a take profit option, but after placing your order if you are watching that market is going more down you can change your take profit limit to any other appropriate take profit limit.  In this case we have pressed "Sell button", in next example we will make a trade with buy botton.

If you want to press buy button then you must set your take profit limit above red graph line i.e in this case 1.0048, you can set any value above this value for instance we can select 1.0058 with a volume of 1 lot size.  In this case it means that we have bought a currency pair with a price of 1.0048 and want to sell it with a price at 1.0058, in this case when blue line will hit the limit i.e 1.0058 your order will execute and details will be as under:

            Buying price             1.0048

            Selling Price             1.0058

            Profit in pips              10

            Profit in dollars         10 if volume was 1.

In case market moves opposite of your expected direction you will face a loss 1 dollar for each pip value goes below the buying value.

I hope you have understood how to start your first trade.  I have started a youtube channel for forex trading training you can visit it and watch the videos for better understanding of forex trading.  Youtube channel link is WATCH VIDEOS please watch the videos and subscribe the channel so that you can get notification of future videos.