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Venturing into Forex for the first time?
Explore the basic concepts of buying and selling.

How to trade Forex?

Many people want to get into Forex trading and make quick profits, but only a few even know how to start. While trading Forex online has now become easier than ever because of powerful platforms like Blueberry Markets, it can still feel incredibly overwhelming to get started with it. Here is the ultimate step by step guide on how to start Forex trading for beginners. But before you dig into the details, make sure you take a look at our What is Forex trading, to get a better and more in-depth idea about Forex trading as a concept.

Four steps to start Forex trading

1. Select your currency pair

In Forex trading, you are basically exchanging the value of one currency with another currency. So you buy one currency while selling another currency, all at the same time. That is why you always trade the currencies in pairs.

The first currency in the currency pair is called the base currency and the second one is called the quote currency. The price of the Forex pair is defined as how much one single unit of the base currency is worth the quote currency.

how to trade forex graphic

To keep things in order, most Forex trading platforms split the currency pairs into the following categories:

  • Major pairs: These include seven currencies which make up for 80 percent of the total global forex trading, including EUR/USD, GBP/USD, USD/JPY, USD/CAD, and AUD/USD, USD/CHF
  • Minor pairs: These mainly include lesser traded currency pairs with major currencies except for USD, like EUR/CHF, EUR/GBP, and AUD/USD.
  • Exotics: These include major currencies against currencies from emerging or smaller economies like EUR/CZK, GBP/MXN, and USD/PLN
  • Regional Pairs: These pairs are often classified by regions like AUD/NZD and EUR/CZK

Most new traders follow the same Forex trading strategies of picking up one or two major pairs to focus on, but you can also start off with minor currencies

2. Decide how to trade Forex

The next step to learn how to trade Forex for beginners is to decide how exactly you want to trade currencies. In addition to choosing the currencies, you can also choose a different market for trading every currency pair. There are two main types of Forex markets that you can consider:

  • The spot market provides you with the live price of the forex pair and allows you to trade on the spot. This is often the best way to start.
  • The forward market lets you agree to settle your trade on a set date or range of dates in the future

3. Make a decision to buy or sell the currency

Now that you know which currency you are trading and how you are trading, you need to decide whether you want to buy or sell the currency to trade Forex.

You should buy a currency pair if you think that the base currency will eventually get stronger against the quote currency, or you think the quote currency will eventually go weak against the base currency. You start profiting as the currency pair value rises but you will start incurring losses if the currency pair falls beyond your open level.

You should sell the currency pair that you have if you believe the value of the pair will decrease, as in -- the base currency will go weak against the quote currency or the quote currency will get stronger against the base currency. Since this is a short position you will be taking, profits will increase as the currency pair’s price starts to fall but you will incur losses if the pair price starts to increase above your open level.

Note: Pay attention to spread in Forex trading. Spread is defined as the difference between the buy and sell prices of the Forex currency pair. When you trade Forex, you will see two prices listed for each currency pair -- the first is the sell price or the bid, and the second is the buy price of the ask. Spread is the difference between each two which covers the trading cost.

Currency Pairs
  • Currency Pairs

  • Indicies

  • Metals

  • Commodities - Oil

Instrument Bid Ask Spread
AUDCAD 0.92867 ↓ 0.92874 ↓ 0.7
AUDCHF 0.69341 ↑ 0.69352 ↑ 1.1
AUDJPY 83.21400 83.21900 0.5
AUDNZD 1.07163 ↑ 1.07173 ↑ 1.0
AUDUSD 0.74910 ↑ 0.74913 ↑ 0.3
CADCHF 0.74664 ↑ 0.74675 ↑ 1.1
CADJPY 89.60200 ↑ 89.60900 ↑ 0.7
Instrument Bid Ask Spread
AUS200 7280.53000 ↑ 7281.33000 ↑ 8.0
EUSTX50 4083.36000 ↑ 4084.06000 ↑ 7.0
FRA40 6505.35000 ↓ 6506.05000 ↓ 7.0
GER30 15593.02000 ↓ 15597.32000 ↓ 43.0
HK50 28742.60000 28751.20000 86.0
JPN225 28656.60000 ↑ 28662.60000 ↑ 60.0
NDX100 14567.64000 ↑ 14568.80000 ↑ 11.6
Instrument Bid Ask Spread
XAGUSD 26.19100 ↑ 26.21100 ↑ 2.0
XAUUSD 1775.59000 ↑ 1775.73000 ↑ 1.4
Instrument Bid Ask Spread
XAGUSD 26.19100 ↑ 26.21100 ↑ 2.0
XAUUSD 1775.59000 ↑ 1775.73000 ↑ 1.4

4. Always be ready to manage your risks

Risk management is important for Forex trading and it is one of the key elements that you should understand when learning how to start Forex trading.

There are two types of orders that you can use for risk management:

  • Stop loss order: With this order, you give an instruction to close the trade at a price which is worse than than the current market level in order to minimize the losses that you might incur
  • Take profit order (Limit order): This is an instruction to close the trade at a price which is better than the current market level in order to lock your price targets.

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  • How To Set a Stop Loss Order in Forex Trading

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  • What are Long and Short Positions in Forex?

    In Forex trading, you can take long or short positions based on expectations of the market rising or falling. Long or buy positions are maintained when traders expect currency pair prices to increase in the future.

  • What is a Spread in Forex?

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    The foreign exchange (Forex) market is the largest financial market in the world. With a daily average volume of about $6.6 trillion and worth over $2.4 quadrillion as of 2021, Forex is a decentralised global market for trading currencies.

  • When Can You Trade Forex?

    In case you are wondering is Forex trading profitable, the short answer is yes. But many opt for Forex traders to make fast profits since Forex markets are operational 24 hours for five days a week.

  • Who trades forex?

    Major players in the Forex market are financial institutions including commercial banks, central banks, money managers along with hedge funds. Many global corporations also trade in Forex to hedge currency risk.

  • Why trade forex?

    As the largest financial market globally, Forex trading is one of the most popular investment avenues for many. The liquidity and huge trading volume make Forex trading an option worth exploring.

  • Forex Margin & Leverage

    Forex trading usually provides much higher leverage compared to other financial instruments like stocks. This is one of the primary reasons why so many people are attracted to Forex, and more and more people have started to enter the Forex trading market.

  • Key steps to making your first trade in Forex

    Making your first trade in Forex successfully requires in-depth knowledge about trading basics and Forex trading strategies. The learning curve to trading currencies can seem overwhelming and complex, but when you have the right information by your side, it can make the entire process all the more easier.

  • How is Forex regulated?

    There are several Forex brokers in the Forex market, and amidst those thousands of Forex brokers, it can become nothing less than challenging for traders to find the best brokers.

  • Rollover rates

    When you hold a currency spot position overnight, the interest you either earn or pay is the rollover amount. Each currency has a different overnight interbank interest rate, and because you trade Forex in pairs, you also deal with two different interest rates.

  • Tips for Forex trading beginners

    In terms of trading volume, the Forex market is the largest financial market in the world. It is also the only financial market that operates round the clock every day.

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