7 steps to get rich from foreign exchange

The source of the following content: Wechat public number Hui classroom

Everyone invests in foreign exchange with the purpose of getting rich, but among the millions of traders in the world, only a few can make continuous profits.

If you are a professional trader with a lot of money, you are not far from getting rich. But for traders without any experience and without large funds, it is difficult.

There are two roads before us, either to give up early, or to practice a "learning from foreign exchange investment".

This road does not need to go through ninety-nine and eighty-one difficulties, but it still requires patience and hard work that is different from ordinary people.

If you want to take the road of foreign exchange profitability, you must first master at least the following knowledge points, which is also a stepping stone to getting rich in foreign exchange!

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Step 1: Know Forex Basics

There are many technical terms in any field. By understanding these terms, it can help you clear up many learning obstacles. For foreign exchange trading, at least you should know what foreign exchange trading is all about?

To trade in currency pairs, you can buy or sell. The eight common currencies are US dollar, Euro, British pound, Japanese yen, Canadian dollar, Australian dollar, New Zealand dollar, and Swiss franc. The currency pair formed by their direct combination, the former currency in the currency pair is the base currency, and the latter currency is the quotation currency.

The most common software used for trading is MT4 and MT5, and real-time quotations of currency pairs can be seen in the trading software. Quotation is divided into buying price and selling price, using the real-time exchange rate of the quote currency. For example, if the buying price of GBP/USD is 1.3743, it means that 1.3743 US dollars is needed to buy 1 British pound. The price of a currency pair represents the value of the base currency relative to the quote currency.

In addition, you need to understand the concepts of pip value and lot size. Forex trading is measured by pip value.

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Step 2: Understand how Forex orders work

Since you are going to trade foreign exchange, you should also know how your order works.

There are buy orders and sell orders in foreign exchange trading. If you think the price of a currency pair will rise, you will go long, and if the price will fall, you will go short. The form of submitting an order can be a real-time direct operation, or an order can be issued to set up a pending order transaction. In addition, there is a passive take profit and stop loss order closing operation.

Whether it is a buy order or a sell order, it will be matched quickly in a large foreign exchange trading market. Your order is matched with other traders or broker desks. Traders in the foreign exchange market include banks, financial institutions and retail investors. The amount of funds and trading levels of everyone are very different, but because of the huge trading volume in the foreign exchange market, there is no so-called "banker".

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Step 3: Learn How to Calculate Profit and Loss When Trading Forex

We invest in the market to make money, of course we must know how to calculate profit and loss. What are the benefits and what are the costs.

Do your calculations before trading, and measure the maximum risk you can take on a single transaction. You can't go in all at once. In the transaction, you can use the percentage of profit and loss combined with the size of the position and the size of the leverage to measure your possible profit or loss.

You also need to understand the relationship between margin and leverage, understand the leverage restrictions in different countries, and the margin limits and liquidation mechanisms of different account types.

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Step 4: Learn How to Research Currency Prices

The core of foreign exchange trading is actually predicting the price of currency pairs. The ways to study prices in investment transactions include national basic news, technical analysis, and market sentiment analysis.

You need to have a basic understanding of these methods and choose the method you want to study. Each way there is a lot to study.

Fundamentals are essentially the analysis of factors that affect the price of a currency, such as the level of economic development of major countries, the central bank's monetary policy, and relevant news, etc. Technical analysis believes that charts can integrate everything, and it is necessary to use technical indicators and chart patterns to study historical price laws and predict price trends. Market sentiment analysis uses the volume of buyers and sellers to predict market price changes.

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Step 5: Determine Your Forex Trading Strategy

Trading requires a trading method, and how can one deal with market changes without a strategy. A trading strategy is a complete set of things that can guide your trading. What kind of products are mainly traded in the whole transaction, what trading basis is used, what kind of trading style is used, how to control trading risks, etc.

Regardless of scalping trading, intraday trading, or swing trading, you can try anything that can help you make a profit. Most people often ignore trading risks when trading. In fact, the trading goal should be to protect capital first and then make profits. Risk management and mentality adjustment can eliminate most people.

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Step 6: Learn about third parties who can help

The so-called third parties that can provide assistance are derivative services that are helpful to transactions, such as foreign exchange signals (intelligence), foreign exchange EA, and documentary communities.

Forex signal means that a third party provides you with trading points, etc., and you only need to execute them. Now many communication groups also provide this kind of order service. In fact, there is a certain degree of uncertainty about whether the signal is reliable. You can try it, but you must observe it for at least one month.

Forex EA uses tools to improve trading efficiency, but tools are always designed by people, and they still cannot make long-term profits. Using EA also requires constant testing and adjustment.

The documentary community is to directly copy other people's transactions. Similar to foreign exchange custody, this is also a shortcut for beginners to trade, but it is too dependent on others, and you will not be able to distinguish it yourself, and you will easily encounter problems.

In fact, it is better to touch these things after you have learned about foreign exchange trading after you have traded by yourself.

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Step 7: Choose a Forex Broker

The first step in entering the market is to choose a dealer. Many beginners don’t know much about foreign exchange dealers, so they choose one at random, but they are trapped before they start trading.

Dealers are very important, we must learn to identify reliable traders, and then choose according to the relevant fees and services.

The above 7-step customs clearance is not easy, so after seeing this, you should be very clear why only a few people can make a profit. If you really want to go this way, I hope you can study every step well and get rich as soon as possible.