THE FOREX TRADING FLOWS
Forex is on everyone's lips in Pakistan, very few people have not heard of it. Why can practically everyone truly see magic in this word? Is it possible to make real money trading Forex: truth or myth?
You are engaged in the foreign exchange market in Pakistan without knowing when you happen to order some imported goods or to buy any currency at the holidays. The Forex decentralized largest financial market (FX) uses two currencies in the pair which form quotes. That gives a real uniqueness to the FX system as a FX pair creates a metric score dealing with buying and selling of various currencies without intermediaries.
The more you work on FX trading in pairs, the more flexible you become. The FX metric gives you the opportunity to build up your trading skills against the most suitable currency in the pair.
What attracts traders and not only traders in FX trading? Firstly, that's the volume of the foreign exchange market with a lot of sessions allowing trading 24 hours per week. Secondly, it is easy to find and invest in a huge variety of currencies for trading. We also need to mention the low transaction costs/fees and the volatility which has differing levels.
WHAT MAKES THE CURRENCY PAIR FLEXIBLE IN TRADING?
The first currency that appears in the quoted asset is a base one. The second currency determines the value of the first one in the pair and gives the variable or quote option.
Look at the EUR/USD example, USD (variable) determines the value of EUR (base) here. The European economy always inspires confidence, it deserves to open a long position (if you have an optimistic forecast about EUR), but the second currency is not always stable, for example, in comparison with the UK economy. By buying EUR/GBP, we place a EUR ‘’long’’ position. By selling EUR/GBP, we place a GBP ‘’short’’ position.
What makes our EUR/GBP choice flexible here? We have two currencies and two options for buying and selling. That’s so flexible to use both sides of these options for profitable trading. Let's imagine that the EUR/USD quote price is $1,000, so EUR1 = USD1. If the quote price rises to $1,250, then EUR goes up, USD goes down.
HOW CAN YOU GET PROFIT IN FOREX?
When the price goes up, buying (a long position) makes a profit; when the price goes down, selling (a short position) makes it.
Coming back to our EUR/USD currency pair, let's see how that can help us in trading. So EUR is worth $1,000 in our case. Let’s open a EUR/USD trade with a deposit of $100. The price rises and reaches $1,250 in a day or two, and maybe in a few hours on the same day. If we are sure that the price is not going to rise more in the near future, we close the trade. Therefore, we calculate the benefit $(1,250 - 1,000) × 100 = $25. If the rate goes down to $990, then we calculate the losses $(1,000-990) × 100 = $10. But there is another way to take the profit with the falling price. Let’s choose a USD short position (sell) with the expectation of falling prices, then buy it back at a lower price to cover the trade with the help of the evident currency difference.
FOREX MONEY MAKING IN PAKISTAN: TRUTH OR MYTH
If you want to make a real profit with IQ Option’s FX trading, you need to be in a trend to make accurate forecasts/predictions for the FX market. Let’s jump into the FX market, if you are set to go. What do you need to start it easily?
• Daily viewing of news of the international currency market.
• Basic methods of Fundamental analysis.
• The basics of Technical analysis.
• Contracts for Difference (CFD), they provide a perfect way to trade various assets, including Forex, Stocks, Crypto, Indices, Commodities etc., without really owning them.
• Articles about investments and the stock exchange.
UNIVERSAL FOREX TRADING STRATEGY
A universal strategy is difficult to develop or find, but there is perhaps a universal formula that will help you build up your strategy from scratch when trading Forex.
GETTING STARTED WITH FOREX TRADING IN PAKISTAN
Getting started with FX trading is very easy. All you need is to install the IQ Option mobile app (the App Store and Google Play) or open your web IQ Option account and complete the KYC verification in a few simple steps.
1. Create your account.
Register with your phone number/email address, and submit your KYC documents.
2. Make a deposit.
Deposit your IQ Option balance (min $10), or link your bank account to deposit for the first time.
3. Start Forex Trading.
You can even start your Forex trading for as little as $0.1!
LAUNCH YOUR FOREX TRADING
- Visit the Forex page in your IQ Option Trade Room.
- Open a new asset. IQ Option offers more than 100 different currency pairs, try to make the right choice.
- Enter a trade size. Here you can see your investment amount in pips (the term for estimated value). The minimum trade size equals 0.001 pip. One more term is used here, that’s a margin. It is the amount required to open a leveraged position. When you enter your trade size, your pip value and margin will be calculated automatically in your IQ Option Trade Room.
- Set the Stop-Loss/Take Profit level (it is also in pips) which helps you close your position immediately when the Stop-Loss/Take Profit level is reached the limit.
- Make your prediction about asset price and open a long (buy) position by clicking the “Buy” button or open a short (sell) position by clicking the “Sell” button.
- Close your Forex trade manually in your Trade Panel on the right when you think it’s high time to do that. Please, keep in mind the Stop Loss/ Take Profit option and the margin option, it means that your position is closed automatically in two cases 1) as soon as your trade reaches the Take Profit or Stop Loss level 2) if your margin level falls below 50% (so called margin call). You can also monitor and check all your Forex trades in the IQ Option Trade Panel.
WHY IS SO POPULAR IQ OPTION FOREX TRADING IN PAKISTAN?
The great advantages of Forex trading with IQ Option as they are:
| Around-the-clock trading. | Forex works around-the-clock (all working days). As the European and UK trading sessions close, the US session is in full swing. So all traders can easily place or close the trade at any time for foreign exchange in the IQ Option Trade Room. | |
| Low trade costs. | Forex trading cost is effective, attracting a commission charge. So you can start your Forex trade with a min size of $1. | |
| Competitive spreads. | When trading, any additional pips moving in your favor is a real profit. A spread may vary depending on market conditions and the leverage selected. You can find the competitive spreads in your IQ Option Trade Room. | |
| More opportunities to profit. | Different Forex pairs are used to spot profitable trades to open speculative currency positions with the going up (buy) and down (sell) options. | |
| Leverage Trading. | Up to 1:30 Leverage in your IQ Option Trade Room, margin level indicates your account health. You can easily see if your account positions are un/profitable and close your trade at any time to get your profit. | |
| Unrealized Profit/Loss in trades. | Use accumulated profit from any open positions to place new trades and drastically increase your buying power. | |
| Set Take-Profit/Stop-Loss in pips or asset price. | Trade in lots. The well-known way of opening positions is also available along with an additional level of flexibility in risk management, providing control with precision. | |
| Transparency. | Be informed on trading costs and conditions, trading session schedule through a prompt in user the IQ Option interface before the order execution. | |
| Improved portfolio interface. | The revamped portfolio IQ Option interface makes it easier for you to manage your assets much more effectively. | |
| *Demo Account for a good start. | IQ Option Demo Account offers a simulated area where you can improve your strategies and practice trades with fictional capital. | |
| Trading Education. | IQ Option Trade Room gives you an access to a Forex trading course, educational tips and materials for improving your trading skills. | |
| Forex Awards. | It has many winner certificates in numerous best trading nominations, one of them in the ‘’Best Trading Platform 2014’’ nomination by the Forex Awards. | |
| Customer Support. | The IQ Option Support is ready to help you in your language - the average response time is 1 minute. | |
| Trading Community. | IQ Option Trade Room offers you a teaching blog and a trading community which change your trading lifestyle. |
* You can test your forecasts/predictions on the virtual balance of the demo account (your demo account will be credited with $10,000 of virtual money immediately after opening your IQ Trade Room), then proceed to the real account (min deposit of $10) and make a profit. Your first predictions can be formed on the basis of the Economic Calendar, on analyzing the Forex news and Trading Community, then you can also use ready-made strategies in further trading.
KEY FOREX TERMS
Base/Variable (quote) currency: The first/second currency for quoting a currency pair.
Bid/Ask: The bid/ask price (the highest/lowest) form a Forex quote of a currency pair.
Spread: Spread is used to denote the difference between bid/ask, the prices are measured in pips.
Pips/points: A pip is a percentage in points. Pips are used to measure the minimum price move and the bid-ask spread.
Leverage: The Leverage mechanism allows traders to use extra funds (a loan) to increase the size of the trades.
Margin: Margin is estimated on the trade size for opening a new leveraged position and the lent funds from the broker. It is measured in lots (one lot = 100,000 units).
Margin call: When your margin level falls below 50%, your opened position is closed automatically (as it is below a specified level).
Liquidity: A liquid currency pair can easily be bought/sold due to trading of the currency pair by many participants.
Swap: Traders can hold their positions open overnight if they want to go on trading with them for the next delivery day. They will have to pay a charge (a swap) for such holding. Here you can check charges and fees applied to each trading instrument.
Related pages
