Forex Fundamentals: An Introductory Overview

Forex trading, in simple terms, is the buying and selling of currencies in the foreign exchange market. This is a process that involves speculations based on market analyses, and strategic interventions. The prospects of a forex trade are so attractive that it has become the largest financial market in the world by trading volume. The average daily trading volume in a foreign exchange trade is estimated to be over 6.6 trillion dollars as per recent data. 

Even though it can be done by anyone who has an internet connection and forex trading account, to make a profit it is essential to have basic knowledge and skill sets. Absorbing loss without major failures is another set of skills that needs mastering. A forex trading course in UAE can be of help given you have the right aptitude. To begin with, here is some basic information that every forex trader should familiarise themselves with. 

Basics of Forex Trading 

  • Currency Pairs: Currencies are traded in pairs. EUR/USD (Euro/US Dollar) or USD/JPY (US Dollar/Japanese Yen) are examples. The popular currency pairs are called Majors. It includes USD traded against one of seven other major currencies. Currency pairs outside this group, particularly the ones without USD, are called minors or exotics. 
  • Market Hours: Unlike stock markets, they operate 24 hours five days a week. So it can be accessed outside normal working hours. This facilitates traders to make it a part-time endeavor while pursuing another profession. 
  • Contract for Difference: In forex trades a trader doesn’t directly buy currencies. Instead, it is a speculation on the movement of price. The point here is that you don’t own currencies. If you speculate that the value of one currency will appreciate over the other you will buy the CFD. In essence, if the speculation goes right a trader will get the difference in currency values as profit. In the reverse case, the trader is expected to take the brunt of the loss. 
  • Leverage: This is a term often highlighted by most forex trading course in Abu DhabiIt facilitates a larger position with smaller capitals. This means that even a small price movement can result in significant profits or losses. 
  • The Role of Brokers:These agents are key players in forex trade in that they act as intermediaries between individual traders and global forex markets. They provide infrastructures and software essential to conduct the forex trade. Some brokers may even provide you with market insights to make informed decisions. 
  • Common Analytical Strategies:Technical analysis and fundamental analysis are the most popular market analysis strategies. While the former relies on past market data for future predictions the latter evaluates the intrinsic value of currencies based on market conditions. In the case of technical analysis Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) are some indicators that matter. A forex trading course in UAE can help to have better clarity of these indicators. On the other hand, the strategy of fundamental analysis requires consistent learning of the market fluctuating factors such as GDP growth, geopolitical events, and central bank strategies. 

The key points mentioned in this section are just the tip of the iceberg. Mastering forex trading starting from the choice of broker to the monitoring of account needs a practical approach with demo practices. Moreover, the technicality involved in market analysis such as the line charts and candle stick charts require clarity provided by experts in this field. Not to mention the gamut of strategies that can only be learned from a comprehensive forex trading course in UAE. This is exactly why Stewarts Business Academy has designed a complete course with real-time insights and demo practices straight from veteran forex traders. We are confident that with proper technical knowledge, strategies, and practical experience you can master the art of forex trading. It is indeed a smart way to make consistent money while empowering yourself with self-employment. 

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