How to trade Binary Forex
A Forex trader always has one objective in mind when trading: to exchange one currency for the other to make a profit.
Here's why we've created the following three-step tutorials to help you bridge that gap and make your first trading:
Step 1: Learn to read a currency pair
One of the first things most Forex traders learn is how to read the currency pair. There are two parts for the currency pair
EUR / USD
Base currency (EUR)
Also known as the transaction currency
Quote currency (USD)
Also known as counter currency
Tip
The base currency is always the same as one unit.
The asking price of the currency indicates how much the currencies required to purchase a unit of base currency. This is better known as exchange rate.
For example, if you see that EUR / USD has a price asking price of 1.05382, you will sell USD 1.05382 (currencies) for every EUR 1 (base currency) you purchase.
If the offer price is 1.05229, you will buy USD 1.05229 for every EUR 1 you sell.
Step 2: Understand when to buy and when to sell
Think that certain currencies will go up or down? Know when you need to buy (or "go long") and when to sell (or "go short").
Traders choose to buy a certain currency pair if they think the base currency value will increase. On the contrary it is true: they sell certain currency pairs if they think the value of the base currency will fall.
Let's compare the difference between buying and selling, using EUR / USD for example:
Buy
You buy EUR and sell USD
You expect EUR to rise in value so you can resell profits
Buy = go long
Sell
You sell EUR and buy USD
You expect EUR to fall in value so you can repurchase it at a lower price (and make a profit)
Sell = go short
Step 3: How to buy your first currency pair
After you decide which position you want to take, the next step is to buy the pair on MetaTrader 5.
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How to buy your first currency pair.PICTURE CREDIT TO https://www.binary.com |
Here's an example of a EUR / USD currency pair and a bid-ask price:
To go long, you need to click on 'Buy' to buy EUR 1 for USD 1.17726
To go short, you will click on 'Sell' to sell EUR 1 and receive USD 1.17725 in return.
