Forex trading for beginners
Forex trading for beginners Forex is a favorite of many types of traders from professionals to beginners. It is a diversified market. Most brokers offer a long list of currencies and each currency is affected differently, allowing you to avoid risk when things get choppy or take advantage of multiple instruments. One currency may move and another may not move at all from the previous day’s price (or rate).
Forex market
Another reason people prefer the forex markets is its volatility; Although this increases risk, it also increases opportunities This is especially true if you are using a strategy that relies on executing trades throughout the trading day.
The large volume of transactions in the forex market allows traders to buy and sell without any delay caused by the lack of buyers or sellers. Forex is also a purely global market.
It is broad and diverse, meaning that when certain currencies are volatile, others are not.
The time factor is also useful, as the forex market is open 24 hours a day, 5 days a week. The forex market opens in sessions:
Forex trading for beginners
For specific instrument trading hours, please refer to: easyMarkets Trading Hours.
Volatility increases as sessions overlap and during the first hour of sessions opening. You can usually expect high volatility during the London/New York session overlap because they represent the largest volume of transactions in the forex market.
profit from forex
Of course, volatility is also affected by political changes and changes in policies that can amplify or dampen the impact of opening times and overlap.
In certain cases the opening and closing of markets can be marked by large price movements, acting on the momentum created by an announcement, event or report.
For example, if the market is generally cautious due to some changes or geopolitical threats as in the case of the trade war between China and the US, the currencies may not move in the same way. Another factor that may boost volatility is market-affecting news coming out on the weekend, causing the currency to jump significantly up or down.
This effect is also called the ‘weekend hiatus’.
Volatility: Opportunities and Risks
There are many ways to trade forex CFDs but most traders prefer day trading for a few reasons: As mentioned earlier, current events and news can move the markets dramatically.
This increases volatility and because CFDs give you the ability to trade up and down moves some traders actually use this as an opportunity.
Certainly, volatility causes prices to move quickly and in some cases unexpectedly, which increases risk.