Are you curious about trading and want to try your hand at trading with very good returns? Then currency trading could be something for you!
Currency trading can also be called forex trading. It may therefore be that this is the term you have heard, but there is no danger. Both currency trading and forex trading refer to the same type of activity – it’s just the names are slightly different.
In this article we will take a closer look at: What is currency trading and how do you get started with currency trading are some of the topics we will cover below.
What is currency trading?
So what is currency trading? Currency trading is about currency trading. It simply means that one currency is converted into another. Currency trading is considered one of the world’s most active markets due to its trading volume of around 5 trillion dollars.
Currency trading will be a good option for investors who want a good return. The return is not long in coming in connection with currency trading.
We have previously looked at daytrading , and it is an activity that requires a lot from investors in terms of time and energy. Currency trading does not work in the same way. Here you do not need any special prior knowledge to engage in currency trading, so it is very practical. But of course it won’t hurt to acquire some basic knowledge in advance.
In practice, you can say that currency trading is about crossing currencies. You invest in a currency cross, and thereby say that you are betting that the value of one currency will rise compared to another currency.
Common currency pairs
There are many different currency crosses to invest in. But the safest and most common method is to focus on a few currency pairs.
Several people have realized this, and therefore there are some currency pairs that stand out a little more than others. Here is an overview of the three largest currency pairs:
- EUR/USD – Euro against the US dollar
- USD/JPY – US dollar against Japanese yen
- GBP/USD – British pound against the US dollar
Get started with currency trading
Now you know a little more about what currency trading is, and then the next step is to get started with it. We’ll take a closer look at how to do that below!
Find a trading platform
First of all, you have to find a trading platform that allows you to do currency trading. It goes without saying that all trading platforms allow this. In today’s market you can find both – platforms that offer currency trading and platforms that do not.
In addition to the fact that it is a prerequisite that the platform offers currency trading, it is also important that the platform is good and reliable. You should also choose a platform where gearing is possible, as well as the ease of use.
For beginners, finding a good trading platform can seem like an impossible task, but it is not. But we have no problem understanding that you might think so, and if that is the case, we have a never-so-small tip for you. Check out the trading platform eToro!
create an account
After you have found out which trading platform you want to use, you must create an account. How this is done will of course vary slightly based on which trading platform you will register with.
Here, however, we have taken the trading platform eToro as our starting point, which we also advised you about above. How to create an account with eToro:
- Go to the eToro website and press “register now”.
- Follow the instructions that appear on the screen, which include filling in your personal details.
- You may also be asked to verify your account. In a sense, this involves proving that you are the person you say you are by presenting something that confirms this, for example providing a national ID number.
- After registration and verification are in order, you will have to deposit money into your account which you will later use for investments.
Find out which currency you want to invest in
After you have registered, verified and deposited, you will have to find out which currency you want to invest in. Maybe you’ve made up your mind about this beforehand, which is great, but at least now you have to make up your mind once and for all.
At eToro, this process will go like a dream. Here you press “trading markets”, “find” and “currencies”. An overview of which currencies you can invest in will then appear. Press “buy” on the desired currency, and follow further instructions that appear on the screen.
Decide how much you want to trade for
When you press “buy” you have reached the point where you have to take a stand on how much you want to shop for.
This can be determined manually, but at eToro you also have the option of using gearing. In that case, you press “X30”, which simply means that you get an exposure of 30x what you pay in the first place.
Currency trading tips
Those who engage in currency trading want to make money. It’s nothing to be ashamed of, because that’s the goal of everyone who does it. Here are some currency trading tips that will help you on your way to your goal!
- Familiarize yourself with the tax rules that apply in connection with currency trading.
- Stick to currency trading of a few currency crosses.
- Keep an eye on what’s happening on the news, because this has a big impact on the market.
- Today’s market consists of a lot of capital/liquidity, and therefore it is advantageous to use your own money or use leverage. Familiarize yourself with how gearing works.
- Familiarize yourself with the factors that affect exchange rates.