Darren Yaw’s guide to Forex Trading.
Do you want to do forex trading for earning profit but don’t know much about it? Forex is a very high-risk investment, and so not many can succeed in the forex world. Darren Yaw and his wife dabble in forex trading and have had some success in it.
This article will give you a complete guide on getting started with forex from Darren Yaw himself and his wife!
What is the forex marketplace, and how does it work?
If you have been confused about the word forex so far, it is nothing but a derived word from foreign and exchange. Currencies are a standard in international business and so are exchanged in order to gain profit through foreign trade and business.
According to Darren Yaw, it is also a popular way of investing for private citizens. It is very similar to the stock market, but you exchange currencies instead of buying a slice of the company.
One thing that is really unique about forex trading is the fact that there is no central market. So, all the transactions are conducted via computer networks from all around the world. It is also open to traders 24 hours a day as it starts at 6 am Sydney time and ends on Friday at 5 pm New York Time.
A starter guide on how to trade forex by Darren Yaw.
Trading forex isn’t as easy as it sounds because one wrong move and there goes all your money. Let’s take a quick look at the starter guide to forex trading.
1. Choose a currency pair
Darren Yaw states that you’re always exchanging or trading the worth of 1 currency for one more in forex. What it means is you purchase one currency while selling another at an identical time. Meaning you’ll interchange pairs, e.g. RM/USD.
Typically, new traders begin by trading the major commonly offered pairs of major currencies – but there are no restrictions.
2. Analyse the market
Darren Yaw says that forex trading is pretty much like stock trading. You may have to research and do an intensive analysis of the market – two tactics that compose the inspiration of trading. Remember that operating on emotion will never end well.
He recommends avoiding feeling overwhelmed by all the various currencies – because there’s plenty, narrow your research on a selected currency pair, and gather valuable resources for the 2. Regularly examine current and historical forex trading charts, and monitor the news for economic announcements, further performing other technical and fundamental analyses.
3. Understand the quote
Since you may trade a pair of currencies, you’ll notice two prices for every currency. The difference between the primary and, therefore, the run of the mill is termed the spread. That difference is the amount that a dealer charges for creating the trade. However, spreads vary in line with dealers.
4. Choose your position – buy or sell?
It is very important to know about buying or selling positions. A buy position means you think that the worth of the bottom currency will rise compared to the quote currency. If you’re buying Malaysian Ringgit /Singapore dollar, you expect the Ringgit’s value to strengthen against the dollar.
A sell position means you think that the worth of the bottom currency will fall compared to the quote currency. If you’re selling Malaysia ringgit / Singapore dollar, you expect the Ringgit’s value will weaken against the dollar.
Let me give you an example:
A buying position
The current price for MYR/USD is 1.3555/560. you suspect that the Ringgit is bullish, so you enter a buy position for one lot or one unit of the MYR/USD. Your trade is priced at 1.3555. Later within the day, the MYR/USD is now at 1.3888/180. Your trade has gained 333 pips, and you decide to shut your position at the current sell price of 1.3888 and make a profit.
A selling position
Let’s say the Ringgit is bearish, and you choose to enter a sell position for one lot or one unit of MYR/USD. Because you’re selling, your trade is priced at 1.3555/560.
Later within the day, the EUR/USD is now at 1.3888/180. Your trade has lost 333 pips. You close up your position at this buy price of 1.3555 and accept your losses.
Ways to avoid losing money in forex
As many start forex without acquiring much knowledge about it, they usually end up losing a lot of money. Darren Yaw said that as there are traders of all levels in this platform, it is easy to lose money if not properly managed.
Here are some tips by Darren Yaw to avoid losing money when forex trading:
Get a reputable broker
The forex industry is known to have much less oversight than any other market. So, Darren Yaw recommends doing your homework and appearance for a reputable broker in order to avoid losing money in interchange.
A practice account is a must
A practice account is a must as it allows the trader to adapt to the techniques and will have less probability of losing money. He recommends using a practice account before you go through life and make sure to stay analysis techniques to a minimum so as for them to be effective.
Keep charts clean
It might be pretty tempting to use all the technical analysis tools offered by the forex trading platform when you first open an account. But it’s up to you to keep control and keep the analysis techniques to the very minimum in order for them to be effective.
Protect your trading account
Your focus might be totally on making money in forex trading, but it is essential to know how to avoid losing money. So, proper money management techniques are a must of this process, and so you should keep an eye out for that as well.
Forex trading can be pretty intimidating, especially if you don’t know much about it and so knowing the basics right is a must. Follow this starters guide by Darren Yaw so that you can trade forex and do it successfully.
