How to trade foreign currencies? All about forex trading for beginners ! FAQs, Example video & more

, How to trade foreign currencies? All about forex trading for beginners ! FAQs, Example video & more, ART OF HACKS
, How to trade foreign currencies? All about forex trading for beginners ! FAQs, Example video & more, ART OF HACKS
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What is Forex Trading?

The act of buying and selling foreign currencies for profit is known as forex trading. It is one of the most common types of trading and can be done with the help of a broker or a Forex platform.

Trading Forex is essentially speculating on currency pair movements. If you believe the US dollar will strengthen against the Japanese yen, you would buy USD/JPY. You will profit if your prediction is correct. If it is incorrect, you will lose.

The two main types of Forex trading are fundamental analysis and technical analysis.

Fundamental analysis examines economic factors such as interest rates, inflation, and political stability that can influence the price of a currency pair.

Technical analysis is the study of past price data in order to forecast future price movements.

To begin Forex trading, you must first open an account with a broker or a Forex platform. You will also need to deposit funds into your account in order to trade with real money.

The Benefits of Forex Trading

Forex trading provides a number of advantages that can be very appealing to individual investors.

One of the most appealing aspects of forex trading is that it is a 24-hour market, allowing investors to trade at any time of day or night. This is especially useful for those who have full-time jobs or other obligations during traditional market hours.

Another advantage of forex trading is the amount of leverage available to investors. Leverage enables traders to control a larger position than they could with their own capital, potentially leading to higher profits. However, keep in mind that leverage can magnify losses, so it should be used with caution.

Finally, forex trading allows for profits in both rising and falling markets. In other words, investors can profit whether the market is rising or falling. This is especially useful in volatile markets where the market’s direction is difficult to predict.

The Risks of Forex Trading

Forex trading carries risks, just like any other investment. Even experienced investors can lose money in this market because it is complex and volatile. Before you begin trading, consider the following risks:

1. The market is volatile.

2. You could lose your entire investment.

3. Because the market is open 24 hours a day, it can be difficult to manage your trades.

4. Before you begin trading, you must have a thorough understanding of the market.

5. You should also be able to control your emotions while trading.

How to Start Forex Trading

With the right foot, Forex trading can be a lucrative way to make money, but only if you get off to a good start. Here are four pointers to get you started:

1. Select a reputable broker. This is most likely the most crucial thing you can do to ensure success. A good broker will give you the tools and resources you need to trade effectively, as well as support if you require it.

2. Don’t put more money at risk than you can afford to lose. It is critical to be realistic about the risks associated with forex trading. Remember that you can lose as well as make money in the stock market, so don’t invest more than you can afford to lose.

3. Learn everything you can. The more you understand about forex trading, the better your chances of success. There are numerous resources available, so take advantage of them. Read forex trading books, listen to podcasts, and watch videos.

4. Make a strategy. It is critical to have a plan in place before you begin trading. Determine your objectives and the risks you are willing to take to achieve them. A plan will help you stay focused and disciplined, which are two essential qualities for any trader.

5. Begin small. When you’re just getting started, it’s best to trade small sums of money. You can always increase your position size as you gain trading experience.

6. Have patience. A successful forex trading career is not built in a day, and neither is Rome. Learning the ins and outs of the market takes time, so don’t expect to make a fortune overnight.

7. Have reasonable expectations. Trading forex is a marathon, not a sprint. It’s critical to have realistic expectations about what you can accomplish. Remember that there will be good and bad days, so don’t be too disheartened if you lose a trade.

8. Maintain your discipline. Discipline is essential in all types of trading, but it is especially crucial in forex trading. Stick to your plan and don’t let your emotions take over.

If you feel like you’re about to make a hasty decision, take a step back and reconsider.

9. Control your risk. One of the most important aspects of forex trading is risk management. You must ensure that you are not putting more money at risk on any one trade than you can afford to lose.

Stop-loss orders are one method for accomplishing this. A stop-loss order instructs the seller to sell a currency pair if it reaches a predetermined price. If the market moves against you, this can help you limit your losses.

10. Have a good time! Forex trading can be exciting and profitable, but keep in mind that it is only a game. At the end of the day, the most important thing is to enjoy yourself and not take things too seriously.”

The Different Types of Strategies Used in Forex Trading

Trend Following
Trend following is a strategy where traders follow trends in the market. Traders look at charts and identify trends based on price action. They then trade based off of these trends.

There are many different types of trend following strategies. One of the most popular ones is Elliot wave theory. Elliot wave theory states that markets move in five waves of three waves each. Each wave represents a trend. A trader would buy near the end of a wave and sell near the beginning of the next wave.

Swing Trading
Swing trading is a type of trend following strategy. Swing traders take advantage of short term trends. They wait for a trend to develop before they enter the market. Once a trend develops, swing traders use technical analysis to determine the best time to enter the market.

Market Timing
Market timing is a trend following strategy. Market timers try to predict future trends. They do this by analyzing past data and looking for patterns. Market timers use technical indicators to help them predict future trends.

Technical Analysis
Technical analysis is a method that uses chart patterns and graphs to analyze the current state of the market. Technical analysts use tools like moving averages and Bollinger Bands to help them make predictions about the future.

Fundamental Analysis
Fundamental analysis looks at companies’ financial statements. Analysts compare numbers in the statement to determine if the company’s performance is good or bad. They look at things like revenue, profit margins, assets, liabilities, and equity.

My Experience

I began trading a few months ago because my strategy is well suited to the forex market. Because the forex market has long trading hours and trends lasts for hours, I can easily implement my trend following strategy.

Example video

Find my strategy video here

Where can I learn about forex in detail for free?


Are forex trading bots profitable?

Yes. Any market with a proper risk management and strategy with decent win rate can give you consistent returns.

What are forex trading hours?

24/5. Refer to the market timing article for detailed timings.

Can forex trading make you rich?

Yes. Any business with dedication and discipline can make you rich.

Can forex trading be a full time job, career or a business?

Yes. It can be any. It also depends upon how you view trading and what you want from it. Any kind of trading is usually considered as a business. It can be a full time job, if you are a scalper or day trader and depend mainly on forex trading for income. You can also choose this as career and explore other opportunities like tutor, mentor, analyst etc.

When did forex trading start?

Roughly 500 years ago. Modern day forex trading began in 1970s.

Do forex trading strategies work for stocks?

Yes. Technicals are the same in any market. But depending on the volatality and trending nature of the markets, slight modifications in the strategy may be required.

Does forex trading work on weekends?


Is forex trading gambling?

No. Gambling depends purely on luck. Trading of any kind can be predicted to some extent with fundamentals, technicals and news events etc. and still be profitable with proper money management.

Should i start forex trading?

Yes. Once you are thorough with your trading strategy and rules, you can start trading forex.

What is the best forex trading platform/app?

Metatrader 4 or 5.

When is the best time for forex trading?

London session or New york session.

When are the forex trading sessions?

Check the market timing article for all the session timings

Where can i learn forex trading for free?

You can check out the free courses on Udemy.

Where to open forex trading account?

You can try sites like exness..

Where to practice forex trading?

You can paper trade free on Tradingview, or metatrader 4 or 5.

What should I know before trading forex?

Refer to the forex glossary and abbreviations below.

Forex abbreviations

Fx – Forex.

Forex – Foreign exchange.

OTC – Over The Counter. Trading happening between 2 persons and not in stock exchange.

TP – Take profit. Price at which you place an order to take profit.

SL – Stop loss. Price at which you place an order to stop your loss.

H – High. Highest price of the day.

L – Low. Lowest price of the day.

C – Close. Closing price of previous day/candle.

O – Open. Opening price of the day.

Usd – US currency Dollar.

Eur – Europe currency.

Aud – Australian currency.

Cad – Canadian currency.

Yen – Japanese currency Yen.

Forex glossary

Currency Pairs

Currency pairs are the two currencies being compared to determine if they are worth buying or selling. These pairs are determined by the exchange rate between them.


Exchange Rate

An exchange rate is the price at which one currency can be exchanged for another. A high exchange rate means that the currency is relatively strong and vice versa.

Spot Price

Spot prices are the current prices of currencies. They are set by the market makers and are not always accurate.

Bid Price

Bid prices are the prices that people are willing to pay for a currency. They are often lower than spot prices.

Ask Price

Ask prices are the prices that sellers are asking for a currency. They tend to be higher than bid prices.


Margin is the amount of money deposited by traders to ensure they have enough funds to cover their positions. Margins are calculated based on the size of the position and the desired leverage level.


The spread is the difference between the bid and ask prices. When buying or selling a currency pair, the spread is the cost of doing business. If the bid price is lower than the ask price, the spread is positive. If the bid price exceeds the ask price, the trade is said to be in-the-money.


Leverage is the use of borrowed funds to make a profit. For instance, a leveraged trader borrows $10,000 in order to open a position worth $100,000. He then uses only $90,000 of his own funds while borrowing the rest. Once the trade goes in his favor, he returns the $10,000 he borrowed and keeps the remaining $90,000. So, leverage effectively multiplies one’s investment by 10 times.


A pip is an abbreviation for “percentage in point,” and it is the smallest price movement that any exchange rate can make. It calculates the amount of change in a currency pair’s exchange rate in the forex market.


Forex is traded in lots. A standard lot is equal to 100,000 units of the base currency. In US dollars, this is $100,000. A mini lot has 10,000 units, while a micro lot has 1,000 units.

Base currency

The currency that appears first in the currency pair (e.g. in EURUSD the EUR is the base currency). Base currency is always quoted against the quote currency.

Quote currency

The currency that appears second in the currency pair (e.g. in EURUSD the USD is the quote currency)

, How to trade foreign currencies? All about forex trading for beginners ! FAQs, Example video & more, ART OF HACKS
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Ramya Vaidyanathan

Self-made independent trader who primarily trades stocks, forex, and cryptocurrency! Specialized in M.Sc. Biotechnology & M.B.A. Loves to learn and share everything that can make people's lives easier. Life hacks are the focus of Art of Hacks, a brand website. This website, in particular, focuses on financial hacks such as trading, digital entrepreneurship, and saving hacks. Feel free to comment, share and subscribe to your preferred category! To learn more about trading and my trading journey, subscribe to my YouTube channel Female Trader Ramya!

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