‘Forex’ or ‘Foreign Exchange’ is a source of income which provides a platform for traders to invest and trade foreign currencies of the world. Forex started in 1875 and now it has become the largest and most liquid market in the world. 

Foreign exchange is becoming widely popular and trusted among the people of Pakistan, given its successful functioning across the world. Apart from the real currencies such as Dollars and Pounds etc., people can also choose to exchange cryptocurrencies such as Bitcoin through Forex. However, Pakistan only allows trade in real currency as cryptocurrency has been declared illegal in the country.

IQ Option is a licensed Global service which provides all the favorable conditions to its users under which they can efficiently make forex trade. It offers a high-quality platform for forex trade which is easy to use and comes with a 24-hour support system. IQ Option provides a Demo account for the beginners to let them get the gist of rules and test their trading skills without risking anything at all. Making an account on the IQ Option app is also very easy and can be done within a few minutes.

However, you should learn the general basics of forex before you decide to make an account. Here we will cover all those basics that you need to learn before starting your own forex trade.

 

6 Steps to start Forex trading in Pakistan

  • Research on the forex market
  • Choose a reliable broker site or app
  • Practice on a demo account
  • Create your original account
  • Choose and buy reliable stocks
  • Monitor the market trends regularly

 

The Basics of Forex Trading

Forex trading is done in currency pairs which means that the traders need to select and invest in a pair of two different currencies (e.g. GBP USD) as buying or selling cannot be done in an individual currency.

The pairs have been categorized into following three groups: majors, minors and exotic, based on their liquidity which is related to their trading volumes. Traders are free to choose any pair from the given three groups. This also means that the traders don’t necessarily need to trade their national currency.

 

Opening a Forex Account​

The IQ Option FX platform offers one of the most favorable conditions for forex trade. It provides with the highest 1:500 leverage and the least amount of deposit which is only $10.

However, one must keep it in mind that a single mistake by him can lead to a total wipe out of his whole balance.

H3 Forex trading week​

The Foreign Exchange market is open five days a week starting from 5 p.m. EST on Sunday to 5 p.m. EST on Friday.​

 

Simple steps to start trading with IQ Option​

After setting up a trading account, you must keep it in mind that it’s easy to earn big with high leverage and it’s even easier to lose everything due to the same reason. For this reason, one should set stop-loss orders.

  • Choosing currency pair: The first step is to choose the pair of currencies. The most common currencies are the most powerful like EUR and USD. However, the rand can be traded with others too.
  • Conducting preliminary analysis: Traders should analyse the past charts and keep himself up to date with global news. Entering Forex is quick and easy but this market is highly volatile. Therefore, reading news and analysis of the chosen pairs can be very beneficial. Moreover, the traders should also focus on overall market and its trends.
  • Picking a quote and spread of the pair: The green figure demonstrates the price at which it is available to buy, and the red figure shows the price at which it is possible to sell. The difference marked between both of these rates is called 'spread'. Spread is the broker’s commission and it varies from one agent to another.
  • Setting the sell and buy prices: Depending on your belief about the future behaviour of currency rates, you can set the sell or buy price. You can choose the buy and sell positions at the same time as well.

 

You should consider that if the chosen currency pair will rise in the market, what will be the best possible price to sell it. Analysing previous trends of the given currency can help in predicting the highest it could go.

 

Benefits of Forex trade

 

A Multimillion Dollar Market

The volume of Foreign Exchange reaches up to trillions of dollars every day as it is the largest and most liquid market in the world.

Profits from small investments

The major benefit of foreign exchange is that huge profit can be made out of a small amount of investment. You can also start trading by depositing just $10 in your IQ Option account.

Profits from Rise or Fall in Prices

This market has no directional trading restrictions. If you think a currency pair is going to increase in value, you can buy it and if you think it could decrease, you can sell it anytime.

Using the Best Forex Brokers in Pakistan

It is also very beneficial to work with reliable Forex brokers as they cover all the other risks which do not depend on you.

 

Risks of Forex Trade

 

Rates fluctuation

The global news on economics and politics directly contributes to the fluctuations in currency rates. These currency rates are rapidly changing and fluctuations are potentially volatile.

Technical language

Like all other industries, foreign exchange has its own jargon which can be hard to grasp for the beginners. An online guide on basics can also be helpful in learning such terms.

Lack of attention or wrong decisions

Foreign Exchange is a high risk market. Lack of attention, pressing a wrong button, entering a wrong amount, making wrong predictions or impulsive decisions can turn in to a huge loss.

 

Tips for Forex Trading

The Foreign Currency Exchange is all about profit and loss Ratio. Every trader needs to be mentally prepared for a loss and invest as much as it is okay for him to lose.

Scalping and Price Action strategies are strongly recommended for the beginners as these can help them in having a better trading experience.

Most commonly a candlestick chart is used to analyze the trends of currency rates over a specific period of time, which helps a trader to predict its future behavior.

The ability to stay calm is also very important. The investor should focus on his psychology and learn to avoid any impulsiveness by keeping a stable emotional state.

Study and research in forex trading and learning from real-life stories are the real keys to any trader’s success. It is also recommended to start small by depositing minimum amounts first. It is absolutely not necessary to start with big deposits and putting everything at stake while you are inexperienced.

Now that you have a got the basics down, it’s time to get started on this journey which will lead you to a life of freedom and financial independence. Happy trading!

 

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