How To Choose the Best Rates Currency

Introduction

The rates currency between the demand and the offer on the Forex market is determined by the exchange course by the quotes and by the price of currencies. The quotation reflects the volume of national currency that is needed to buy one unit of foreign currency.

Let’s see some examples that will help you to understand the rates currency.

Step 1

We have the rates currency EUR/USD at 1.20/1.22. This means that you can sell one Euro for 1.20 dollars, and you can buy one Euro with 1.22 dollars. The objective on the Forex market is to make profits from the exchange of one currency against the other, anticipating a movement of price, so that the bought currency would appreciate over time.

Step 2

For example, with a leverage of 1:10, for each euro, you will have the possibility to control 10 euro. Practically, with a sum of 10 000 dollars, you can control 100 000 dollars.

Step 3

If you want to start trading on the Forex market and to use the rates currency effectively, you will have to choose a dealing center. Besides this choice, you will have to establish a money management strategy. The market offers a multitude of platforms, and the aggressive campaigns used by those platforms to attract clients will make it harder for you to choose the best option. Once you have entered the market, you might wonder how to make profits, but you must get through the necessary steps to become a true master of the rates currency. Trading on the Forex market implies a series of factors, such as analyzing the market, establishing a trading strategy and taking decisions.

Step 4

When you are buying or selling currency, you are opening a position. The positions of rates currency could be long, when you buy a pair of currencies or short, when you sell the respective pair. Closing the rates currency positions will generate loses or winnings.

 

Step 5

Another interesting aspect of the rates currency market is the fact that you can control a large sum of money, even if you have a reduced sum at your disposal, with the help of the leverage effect.

Tips

First, you must understand how the information is delivered to you. Without understanding the terms, you will be a part of the people that lose in the market. We can talk about a Forex education, as long as there are factors that can influence the rates currency. This way, the price is influenced by the economic, politic and psychological factors, imposing trends and tendencies. If you want to mark your profit, you will have to identify the best periods to close the positions, and to determine the periods when the market moves in one direction or the other.

Technical analyzes showed that the history repeats. The rules that were good in the past will work in the present and in the future. However, there is a possibility to have deceiving signals because a superficial analyzes over the evolution of the products, and it is your responsibility to use the signals accordingly.

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