How To Trade Forex in the Netherlands

Introduction

Forex market or Forex exchange market is the biggest market in the world in which international currencies are exchanged. It is sometimes called as Fx market or Currency market. Banks, businesses, currency speculators, investors, governments, travelers, and brokers are among those who trade the Forex market. Unlike stock exchange market, trading occurs over the counter, which means there is no central marketplace involved. Hence, traders can compare costs and select the dealers they want to do business with. The foreign exchange market decides the value of a country’s currency in comparison with another currency. In Forex trading, a trader can buy a certain amount of a single currency by a certain amount of a different currency. When a trader assumes that a particular currency rate will increase, the trader can decide to buy (go long) that currency. Traders can make use Forex Trading Strategies which are based on technical analyses that assist the trader to formulate his decision to either purchase or sell a currency pair. Forex Trading Strategy may be basic or advanced and manual or automated. A manual system means the trader waits and looks for signals; his analysis will help him choose between buying and selling. On the other hand, an automated trading system uses software, which has been taught to look for signals and analyze them. May trading strategies are accessible online.

How to Trade Forex

First, you must learn and understand the basic Forex terminologies and how to compute profits:

• Forex Market- largest market in the world in which international currencies are exchanged or traded
• Currency Pair- two currencies that make up an exchange rate
• Base Currency- first currency in a pair on
• Quote/ Counter Currency- second currency in the pair; *For example, EUR/USD (EUR is base while USD is quote or counter)
• Exchange Rate- the value of one currency expressed in terms of another
• GBP/USD=1.589 (1 British pound is equivalent to 1.589 dollars)
• Long Position- to buy the base currency and sell the quote currency
• Short Position- to buy the quote currency and sell the base currency
• Bid Price/ Sell Quote - the best price at which you can sell the base currency; *For example, if EUR/USD quotes 1.3200/03 (you can sell 1 Euro at the bid price of 1.3200 dollars)
• Ask Price/ Offer Price/ Buy Quote – the best price at which you can buy the base currency; *For example, if EUR/USD quotes 1.3200/03, (you can buy 1 Euro at the offer price of 1.3203 dollars)
• Spread- the difference between the bid price and the ask price

In calculating profits, you must first identify what pip is. A pip measures the change in value between two currencies. Normally the change in value in 1 pip is 0.0001. For example, if your EUR/USD trade moves from 1.3200 to 1.3201, your currency value has increased by 1 pip. To determine whether the value of your account has improved or dropped, multiply the number of pips that your account has changed by the exchange rate. After familiarizing the terminologies in Forex market, you must also learn how to read a forex quote. For instance, EUR/USD quotes 1.3200/03 (the bid price is on the left and the ask price is on the right). Now you can choose what currency you would like to purchase and sell based on the status of the economy and trading of a certain country. Reading economic reports and political updates may also serve you in making your trading decision. Next, you can research and review different brokerages before starting a Forex Brokerage account. This will ensure your safety and security during the process of Forex trading. When opening an account, you can opt to use a personal account where you can trade on your own or a managed account, which allows a broker to trade on your behalf. Check for fees and charges when registering an account. After making sure the broker is legitimate and all account information is correct and accurate, you can now activate your account and begin trading. In trading, it is necessary to have an understanding of the market. Market analyses involve different methods. Technical analysis entails reading charts or past data in forecasting the movement of a particular currency. Another method is fundamental analysis. This requires you to become familiar with the basics of a certain economy; hence, the information will serve as your bases in trading. Another method is called sentiment analysis, in which the technique is more subjective. With this, you must evaluate the market’s disposition or behavior. Now you can determine on how much you are going to invest depending on your broker's policies. After deciding on your margin, you can already place your order. When placing orders, you can either have your broker do it for you at the current market rate or instruct the broker to carry out a trade for you at a definite price. You can also select to purchase a currency higher than the current price or sell a currency less the current price. Finally, your will have to observe your profit and loss and learn new strategies and information about Forex trading, increasing your profits in the long run.

Learn More about Forex Trading

These sites are for beginners as well as experts in Forex Trading: http://www.babypips.com http://www.investopedia.com http://www.goforex.net http://www.forextime.com http://www.xe.com/currencytrading http://www.learntotradethemarket.com http://www.fxcm.com/

Websites & Firms in the Netherlands

and Europe for Forex Trading

http://dutch.etoro.com/ http://www.easy-forex.com/ http://www.forexyard.com/en/ http://www.fxdd.com/ http://www.fxpro.co.uk/ http://fxtrade.oanda.co.uk/ http://www.gcitrading.com/ http://www.hotforex.com/ http://www.markets.com/ http://www.Optimarkets.com/ http://www.plus500.com/ http://www.roboforex.com/ http://www.tallinex.com/ http://info.worldwidemarkets.com/