The most frequent questions asked by new traders are: What is Forex Trading? And, How to trade Forex? The forex markets are the global currency markets accessed by traders via brokers. The difference between the Forex markets and the stock markets is that Forex pairs are not traded on a central exchange like stocks. Forex trading has expanded to include contracts for differences (CFDs) on other assets such as stocks, indices, and commodities, which should not be confused with actual stocks. While CFDs represent the underlying stocks, they have slight differences in that the CFDs can be traded when the actual stock market is closed.
The Forex market is one of the most liquid markets globally, with transactions exceeding 5 trillion dollars. Most of these transactions are made by large financial institutions such as central banks and top investment funds. Traders and investors account for a significant portion of the Forex trades executed each day, with most traders trading the EUR/USD currency pair.
Forex trading is the act of buying one currency while selling another by buying and selling currency pairs. For example, buying the EUR/USD currency pair means buying the euro while selling the US dollar. This principle applies to all currency pairs traded in the Forex markets. There are numerous currency pairs for traders to trade, including major and minor currency pairs and exotic pairs.
Forex trading steps
To invest in the Forex markets and become consistently profitable, you must follow a few steps to increase your chances of success. These steps are detailed below:
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Learn the fundamental principles of foreign exchange trading.
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Know how to predict prices based on support and resistance levels.
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Learn how to use the MetaTrader platform.
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Learn technical analysis, including how to use indicators and charts.
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Identifying the appropriate entry and exit points for specific currency pairs.
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Learn how to manage your risk to limit losses and maximise wins.
If you follow the above steps correctly, you will gain extensive experience trading the Forex markets and becoming a successful trader. Learning the above skills will help you trade multiple instruments since they are universal skills.
Advantages of forex trading or online trading
Trading the forex or foreign exchange market has many advantages that make it different from other investment markets. These factors are listed below and are why many investors prefer to trade these markets instead of traditional investments.
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Trading happens 24 hours, five days a week.
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You can start with minimal capital.
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The Forex markets have high liquidity.
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Traders can make profits from both rising and falling prices.
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You can trade from anywhere in the world at any time.
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Traders can practise trading on a demo account before moving to a real account.
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Forex trading allows for high leverage levels.
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Traders can trade a large selection of major and minor currency pairs.
Therefore, it is a very distinctive market for traders and investors from different countries worldwide as it has many advantages over other investment markets.
Online trading strategies
To achieve success in the forex market or the online trading markets, you must follow a consistent trading strategy aligned with your personality with an edge in the markets. There are numerous trading strategies used by investors globally, and the ones listed below are just a few of these strategies. They include:
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A price breakout strategy.
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The high to low trading strategy
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The Recovery Zone Strategy.
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Moving Average Indicator Strategies.
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Bollinger bands strategy.
Therefore, you must carefully examine and study the state of the markets from all angles. Most traders choose to focus on fundamental or technical analysis, with either strategy having its strengths and weaknesses. However, the best traders incorporate both strategies in their trading routine to maximise their trading results by increasing their profits and reducing their losses.
High-risk investment warning: Trading Foreign Exchange (Forex) and Contracts for Differences (CFDs) is highly speculative, carries a high level of risk and may not be suitable for all investors. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin. Any opinions, news, research, analysis, prices or other information contained in this presentation is provided as general market commentary and does not constitute investment advice.
Editors’ Picks
EUR/USD recovers to 1.1750 region as 2025 draws to a close
Following the bearish action seen in the European session on Wednesday, EUR/USD regains its traction and recovery to the 1.1750 region. Nevertheless, the pair's volatility remains low as trading conditions thin out on the last day of the year.
GBP/USD stays weak near 1.3450 on modest USD recovery
GBP/USD remains under modest beairsh pressure and fluctuates at around 1.3450 on Wednesday. The US Dollar finds fresh demand due to the end-of-the-year position adjustments, weighing on the pair amid the pre-New Year trading lull.
USD/JPY rises to near 156.60 as US Dollar Index refreshes weekly high
The USD/JPY pair trades 0.2% higher to near 156.60 during the late Asian trading session on Wednesday. The pair gains as the US Dollar trades higher, following the release of the Federal Open Market Committee minutes of the December policy meeting showed on Tuesday.
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EUR/USD Price Annual Forecast: Growth to displace central banks from the limelight in 2026 Premium
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US Dollar Price Annual Forecast: 2026 set to be a year of transition, not capitulation Premium
The US Dollar (USD) enters the new year at a crossroads. After several years of sustained strength driven by US growth outperformance, aggressive Federal Reserve (Fed) tightening, and recurrent episodes of global risk aversion, the conditions that underpinned broad-based USD appreciation are beginning to erode, but not collapse.
GBP/USD Price Annual Forecast: Will 2026 be another bullish year for Pound Sterling? Premium
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Gold Price Annual Forecast: 2026 could see new record-highs but a 2025-like rally is unlikely Premium
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Top 10 crypto predictions for 2026: Institutional demand and big banks could lift Bitcoin
Bitcoin’s (BTC) adoption story is unraveling and the king crypto could see institutional demand return in 2026. Crypto asset managers like Grayscale are betting on Bitcoin’s rally to a new all-time high next year, and themes like Bitcoin as a reserve asset are emerging.
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