According to Alan Safahi, a professional entrepreneur and founder of a startup company in San Francisco, forex is a global market that allows people to trade 24/7 with lower transaction rates. It is a high-liquidity market and suitable for beginners, allowing them to purchase or sell currency pairs, depending on the market conditions.
However, if you don’t have enough knowledge of forex trading, making your first trade would become challenging. Safahi has conducted extensive research, and based on his experience and knowledge, he has come up with easy steps that can help you make your first forex trade. Read on!
1. Select a Currency Pair
According to Alan Safahi Orinda, forex trading has a unique nature, allowing you to exchange one currency value for another. In simple words, you will purchase one currency and sell another simultaneously. Safahi says a forex trader always trades a pair of currencies.
In addition, beginners should start by trading commonly offered pairs of currencies. However, you can trade different currency pairs if you have enough money in your account. Safahi recommends trading in Euro and U.S dollars.
2. Analyze the Market
Alan Safahi advises beginners to make research and analysis the foundation for their forex trading endeavors. If you fail to perform your research and analysis, you will operate on emotions, leading to a wide range of complications.
Safahi says you will find a wide range of forex resources when you start researching. Although it will seem overwhelming initially, when you study a particular currency pair, you will find valuable resources that you can use to streamline your analysis.
Make sure you look at the historical and current charts, monitor news for financial and economic announcements, consult indicators, and carry out other analysis activities. The purpose is to gain details about the currency pair that you want to trade.
3. Focus on the Quote
In general, you will see two prices for all currency pairs. For instance, the first rate is the currency pair’s selling price, and the second rate is the price at which traders buy the currency pair. It is crucial to understand the concept of the “spread,” which is the difference between the first rate and second rate.
Spread is the amount that a forex dealer will charge for conducting the trade. Bear in mind that “spreads” vary from dealer to dealer. So, make sure you find a dealer who offers a competitive spread on different pairs of currencies.
4. Pick Your Position
According to Alan Safahi Orinda, if you have traded financial products, such as bonds and stocks, you will know that you can speculate on one market direction – i.e., “UP.” However, forex trading is slightly different from other types of trading. Because you buy one currency and sell another simultaneously, you should speculate on the “UP” and “Down” movement in the forex market.
When you pick a “Buying” position, you think that the base currency’s value will rise compared to the quote currency. For example, if you opt to buy Euro and Dollar, you believe that the Euro’s price will go strong against the dollar.
On the other hand, when you pick a “Selling” position, you believe the base currency’s value will fall compared to the quote currency. For instance, if you want to sell the Euro/Dollar, you think or analyze that the Euro’s price will weaken against the U.S dollar.
Final Words
Forex trading is an excellent opportunity for beginners if they make efforts and improve their currency trading skills. The steps give above will help you make your first forex trade. Until Next Time!
Originally Posted: https://alansafahiorindaca.wordpress.com/2021/07/23/essential-steps-making-first-trade-in-forex/
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