Traders earn money due to the currency speculations in the Forex market. The Forex deal occurs as follows: a trader opens a deal and places an order to buy one currency for another. According to his forecasts, the euro exchange rate against the dollar will decrease, so the deal will be to buy the dollar and sell the euro. If the trader's currency calculation is confirmed, the Forex deal will bring profit. In this case, outcome of the transaction depends on the level of the euro's depreciation against the dollar.
A trader carries out all his transactions with a broker’s help. Trading takes place on the basis of a trading terminal, most often MegaTrader-4. On this platform, a trader tracks his opened and closed positions, the balance of his account, the volume of the trading position, and so on.
It takes just a few seconds to open a deal.
Let’s analyze all stages in detail!
1. Select a currency pair and request a currency quote.
2. Determine the volume of the deal and the desired level of profit. Naturally, the larger the deal volume is, the more profit can be brought. Immediately after the profit reaches the selected level, the transaction will automatically close.
3. Open a position (deal). This can be either a buy or a sell. You can also use pending orders (buy stop, buy limit, sell stop, sell limit), which a trader usually places above or below the current market price.
4. Trading. It is important to remember that the price offered by a trader is only valid for a short time, and, accordingly, it is necessary to act at once.
5. Close a deal (position) and get your profit to the account.
In addition, it is recommended to set a loss limit. This can be both: the total amount of your deposit or the amount below your deposit level to minimize the risks.
It is important to remember a trader can no longer cancel his application when concluding a deal. A position should be closed with profit, loss, or zero. Therefore, it is very important to take seriously this process and fill out all the information as accurately as possible.