How do I trade forex?

There are so many definitions for foreign exchange commonly known as forex. The most common definition is the exchange of one currency  for another at an agreed exchange price. It is also defined as a market where currencies are traded. In other words Forex is the buying and selling of currencies.


This market is opened 24 hours a day 5 days a week, giving you the flexibility of trading any time after work or whenever you hear a financial scoop.

 Forex is the largest financial market in the world with traders buying and selling currencies simultaneously through a broker. These currencies are always in pairs e.g. EURUSD implying EURO and US dollar, GPB/USD implying the British pound and US dollar. So when you trade in forex, it simply means you either buy or sell currency pairs.  Agreed exchange price always fluctuates (rise and fall irregularly) based on which currency is stronger at the moment.

How to make money in Forex

Let's take the idea of buying to explain this. What if you bought something (it could literally be almost anything...a house, a piece of jewelry or a stock) and it went up in value. If you sold it at that point, you would have made a profit; the difference between what you paid originally and the greater value that the item is worth now.

Currency trading is the same way...

Let's say you want to buy the AUDUSD currency pair. In this example AUDUSD implies Australian Dollar and the US Dollar.  If the AUD goes up in value relative to the USD and then you sell it, you will have made a profit. A trader in this example would be buying the AUD and selling the USD at the same time.

For example if the AUDUSD pair was bought at 1.0615 and the pair moved up to 1.0700 at the time that the trade was closed/exited, the profit on the trade would have been 85 pips  ie  1.0700 – 1.0615 = 85 . Also, it makes no difference which currency pair you are trading. If the price of the currency you are buying goes up from the time you bought it, you will have made a profit.

Here is another example using the AUD. In this case we still want to buy the AUD but let’s do this with the EURAUD currency pair (Implying Euro and the Australian Dollar). In this instance we would sell the pair. We would be selling the EUR and buying the AUD simultaneously. Should the AUD go up relative to the EUR we would profit as we bought the AUD.

What is required to trade forex?

Basically there are no special requirement to trade forex . You simply need the right information and education.  The financial world changes constantly and with it does the rules of Forex trading. You have to be willing to stay up to date, keep learning, and continuously testing your knowledge   Keep an open mind as a trader all the time to make profits consistently.

v  With all this been said as a beginner you need to practice whatever you have learned on a demo. Practice account. It is called practice account because it is meant for practice and testing of strategies, you would to practice every single information or details you learn.

v  How do you practice on a demo account? By selectively and choosing a broker wisely. After choosing your broker you need to open a demo account with them, download the mt4 platform and start practicing till you have practice enough then move ahead to a real account. Some Demo platforms are very useful. You will get real time updates as if it were a real account. The only difference would be the virtual funds. For example, Profiforex Demo account helps you to understand all that the broker has to offer, such as execution speed, spread and slippage occurrence.

v  Start with a small deposit and increase it gradually

v  Be emotionally Stabilize by controlling anger, stress and happiness.  Trading Forex is an emotionally trying task. Those who are able to create consistent profits have taken it upon themselves to manage their emotions.