Currently, Forex trading has become incredibly popular. But for Forex trading, it is necessary to know the basic concepts of this trade, methods of analysis, and trading strategies. For this, it is essential to study. In this article, we will analyze what types of Forex study exist and which one will be optimal for you.
What is Forex Trading and How Does It Work in the Philippines?
Let’s start with the answer to the question of what Forex trading is and why so many people are talking about that.
Forex trading is trading on the foreign exchange market, so it is currency trading. Currencies are traded in pairs, like EUR/USD or USD/JPY, which means that to buy one currency, you need to sell another. There are main and quote currencies in a currency pair. The main currency is listed first, and the quote is listed second. The currency pair rate means the number of quotes the currency trader needs to sell to buy one unit of the main currency. The goal is to buy the currency with the lowest price and sell it with the highest price. So traders make a profit from the market fluctuations. Some reasons affect the changes in the market. For example, the interest rate, when central banks raise the interest rate, makes the country more attractive for investors and, consequently, makes the currency stronger and more valuable.
The resource prices affect currencies just as strongly. Some countries sell a huge amount of resources, so the economies of these countries depend on resource prices. When the price of a resource rises, it strengthens the currency of the country trading that resource. Also, the country's international policy affects its currency. The better the country's trade relations, the stronger its currency because there is a demand for this currency. The strength of the country's economy affects the currency. The stronger and more stable the economy, the more products it exports, accordingly, the stronger and more stable the currency.
Therefore, to assess where the exchange rate will move, it is necessary to assess not only the events on the foreign exchange market but also the world events. Also, traders use technical analysis, where they use charts and technical indicators. So let's look at three options for learning Forex.
Ways to learn Forex trading basics In the Philippines
Learn in free courses
You can find many courses on the Internet, and they can be both paid and free. Of course, these courses differ from each other. Free courses have both advantages and disadvantages over paid ones. Let's analyze the advantages of free courses. Of course, one of the biggest advantages of free courses is that you don't need to spend any resources to complete them except your time. In the courses, you will be able to find information structured by topics, so it can be easy to understand. There are many courses for both beginners and more experienced traders, and you can also find comprehensive courses, as well as those that deal with one topic in detail. Among the disadvantages, we can note that you complete all free courses on your own because they do not involve mentoring. At the same time, this can be an advantage because you can take the course at your own pace if it is convenient for you to go through everything in a short period or, on the contrary, stretch the course over time. One of the most popular platforms where you can find free Forex learning courses is Daily Forex FX Academy. There are 15 different courses with free access, so you can choose the most appropriate for you.
When taking a free course, you decide for yourself what period of time you are ready to take it, and you will not have a clear schedule, so you will need to create it yourself. Free courses do not offer you mentorship, so you have to figure out all the questions yourself.
Learn on paid courses
Paid courses, as well as free courses, offer you structured information. The course can include information both in text format, and in the format of videos and presentations. Usually paid courses offer mentoring (very inexpensive courses may be an exception) of successful traders, where you can get examples of profitable strategies and listen to knowledgeable people in this niche. There are various paid courses, the variety of which is even greater than the free ones. So, you can find one that exactly will fit you for sure. But at the same time, if the course has a mentor and lecturers, then you pass this course at a certain speed, even if the lectures and materials are available to you for a long enough period, and perhaps you are given unlimited access, then you can ask questions at a certain time.
Paid courses often offer access to trading rooms, which gives paid courses an advantage over free ones. Paid courses have a fairly wide range of prices, so you will be able to find courses to suit any budget. Courses differ in the term for which they are calculated, the term of access to the materials, the number of courses available, the level, the course developer, and the conditions offered by the course. Accordingly, all the above characteristics affect the price of the course.
Learn with YouTube channels
Another popular way to learn about Forex is through YouTube channels. Now you can find hundreds of thousands of videos on YouTube about Forex trading. Many channels do daily and weekly broadcasts on market news and events. YouTube channels create thematic playlists, for example, a playlist with videos for beginners or a playlist that will help you understand indicators, a playlist about how to use trading tools. One of the largest trading YouTube channels is Warrior Trading. It currently has 1 million subscribers.
Here you can find a playlist for beginners called "Day Trading for Beginners: The Basics", as well as videos on how to reduce your costs and how to choose a trading platform. YouTube videos can be a supplement to your courses, and you can also read the comments and learn about the effectiveness and informativeness of the video before watching it.
Using a Micro Forex Account to learn to trade in the Philippines
Also, the method of studying Forex trading is the use of a micro account. A micro account is an account with a very small amount of deposit. This helps you to reproduce knowledge in practice after taking courses or learning the basics of Forex trading. Because a micro account is an account with a small deposit, you will not be able to lose a lot of money because your losses will be limited to this deposit, but you will be able to understand the principles of the market.
Let's look at the basic concepts of Forex trading.
The smallest price movement of a lot is called a pip (a lot is a certain number of units of the traded currency). A pip is equal to 1/10000 of the base currency. If a trader trades a lot of ten thousand, then the price change of one pip will be equal to the price change of one currency unit.
Stop orders and limit orders are divided into two types, buy stop and sell stop. Where a buy stop means the purchase of an asset at a specified price and above, a sell stop is the sale of an asset at a specified price and a price below. In fact, this type of order is used as a stop loss. After all, a buy order is used when it is expected that the price will increase in the future. And stop-sell order is used when they expect that the price will continue to fall in the future.
There are two types of limit orders, buy limit and sell limit. The buy limit determines the price lower than the current market price.he order will be executed only after the price drops to a certain level. The sell limit determines the price, which is higher than the current market price, at which an order to sell a certain asset will be placed.
Common Mistakes That Beginners Make
No prior research
Do research before trading. You can miss events that can have a big impact on the market and already affect the expectations of market participants. So if you don't do this before trading, you could end up with big losses.
Trading unknown currencies
Each currency has its own characteristics. Some factors affect certain currencies more than others. There is also a correlation between currency pairs, so if you are familiar with all these factors, you can predict the behavior of a currency pair.
No weekly/monthly goals
Often beginners are haunted by the illusion of winning. After all, beginners do not keep statistics of their deals, so it may seem that you are still winning, but at the same time, most of your deals are losing. It is worth determining for yourself how much money you plan to earn per week and month and how many deals you plan to have as winners. Also, keep statistics of strategies, so you can determine which is the most successful.
Leverage allows traders to trade lots that are significantly larger than traders' deposits. However, the more leverage you use, the larger the lot you trade.The pip will also increase, and accordingly, when the price moves in the opposite direction from what you want, you will incur greater losses. Therefore, beginners should be careful with leverage. And start with a small one to understand the principle of its operation.
What is stop loss in Forex trading?
A stop-loss order is a tool to help you manage your risks. You can determine the price at which your position will be closed. This tool will help you cut your losses.
What is profit order in Forex trading?
A profit order is a type of limit order which allows you to lock in a certain level of profit.
What should you study in college to learn Forex trading?
You can trade Forex without an education. However, a background in business, economics, and mathematics can be an advantage in this field.
How much money do you need to start Forex trading in the Philippines?
You can start trading even with a deposit of $10, but the optimal deposit is $100.
How long does it take to learn Forex trading in the Philippines?
It may take you up to a week to learn the basics of Forex, but Forex is a vast market, so you can build your knowledge over the years as you trade.
In this article, you can read about the main ways to learn Forex, and you can choose the best one for you, depending on how much you are willing to pay for knowledge, how much time you can spend on acquiring knowledge, and whether you like to learn something yourself or you need help.