Today, you will know how to make money on Forex using your trader profile of one of the world’s leading finance brokers, LiteFinance. You will learn how to enter and exit your trades in Forex to make profits.
Prepare for trading
Well, to start trading and making real money, you will need to register a trader profile and open a trading account with a broker that will provide access to the global foreign exchange market. This must be a real account, on demo accounts you just check your trading plan but you can’t take part in real currency trading or stock trading.
The main page of your profile looks like the one in the figure above. Now, let us see what each section means:
1. Of course, we can’t speak about any profit if do not have a real account or any money on the account. In the LiteFinance trader space, your first real trading account is automatically created when you register your personal (client) profile. So, to earn any money, you first need to top up your account with your online broker.
To top up your trading account, click on the “DEPOSIT” account. There will open a window where you are offered numerous ways of depositing your brokerage account, from a bank transfer or a credit card to various online wallets or payment systems. In general, everything is simple and easy.
2. After you put some deposit on your account, you will see a change in your funds in the trade panel in the bottom left corner. The tab is called ASSETS TOTAL.
3. After your trading account is topped up, you can start making money. First, you need to select a trading instrument (an asset you are going to trade).
We won’t be extravagant and choose the most traded currency pair EURUSD as an example(here, the euro is a base currency and the dollar is a quote currency or a counter currency, because you always trade a currency pair, not a single currency). Click on the EURUSD tab and there will open a terminal window with the currency pair we have chosen.
4. There is a price chart in the middle of the window. There are various types of price charts, but it displays a candlestick chart by default. The price chart depends on your trading style, indicator trading, price action strategies, or Robo advisors will use different types of trading charts.
To determine the trade direction (whether we will buy or sell), we need to perform a technical analysis of the chart to see the current market conditions. As we can make profits from both the price rise and the price fall, we need to find out what will happen to the price later, if it will rise or decline.
If we assume that the price will fall, then we need to sell the pair now, when the price is higher then it will be, then, when the price falls, we will buy it at a lower price and earn on the difference. If we assume that the price will continue rising, it is better to buy now, while the price is low.
And when the price goes up, we can sell it at a higher price and benefit. Well, we should make a trading decision. It is basically quite easy if you know the basics of technical analysis. You can use the Analytics section in your profile. There is currently a sell signal for this currency pair. We shall follow it and enter a sell trade.
5. To enter a sell trade, choose the Sell trade. There, by the way, will be the price, which you enter your trade at.
6. Next, we need to set the volume of our trade. This is the amount of money we want to invest in the trade. The more money you put in the trade, the more is your potential income. However, the more you invest, the more you risk. So, we choose the golden mean.
The trade volume on the exchange is conventionally called the lot. One lot unit is 100,000 units of the base currency. We couldn’t enter a trade if the broker didn’t provide financial leverage. But fortunately, our broker helps us offer leverage, so 1 lot costs us just about 500 dollars.
However, based on my own experience, it is rather risky to enter a trade with a whole lot. According to the basics of risk management, you’d better decrease the trade volume at least by half. So, we choose the volume of 0.5 lots, which will be roughly 280 dollars.
7. Well, we now need just to click on the “sell” button. Once we pushed this button, we give our broken order. A new order is instantly placed in the global market. And when your order is put in, there will be a confirming message specifying the price, at which your order has been executed by the broker.
8. You will see the trade entered by the changes in the information displayed on the trade panel at the bottom of your screen. The Current Change tab now displays the changes in the balance of our trading account in real-time.
Differently put, we can now see the profit or the loss yielded by our trade. Although the price hasn’t changed since we entered the trade, the current change shows a loss of -5.00 USD.
What has happened? It is not strange. We have paid the commission charged for opening a position and spread, the difference between the buy and the selling price.
Now, we first need to gain and compensate for this commission, and then, we will make a profit. In real trading, this commission is not so high as it seems; it is just about 1%-2% of the position size. If you open long-term positions with a holding time of 1 week or longer, and with a profit of a few thousand dollars, you won’t even notice a commission fee of 5 USD.
9. After a while, we can look at the price chart. We have been right, and the price is going down generating a profit from our sell trade.
10. Look at the Current Change line. The value is now positive, its color is green. This means that the order we put has already made a profit of +$18.
11. If we think this profit to be enough, we can safely click on the “close” button. This will signal that we are going to close our sell trade at the current price and take our profit to enroll it on our trade account. If you complete your trade (that is enter and exit) within the same day, this is a day trading and you are a day trader.
12. After the trade is exited, no changes are registered on the balance account, it is now fixed at an amount that is more than it was before we entered a trade as we have made a profit.
13. To realize that our profit is real, physical money, we can withdraw it from the trading account. To do this, we need to click on the WITHDRAWAL button.
14. Now, try to make a few trades on your own, and you’ll see that it is quite easy. There is nothing to complicated in making money on the forex market.
There we are all! As you see, the process of making trades in the modern forex market has become much easier and simpler than it used to be just a decade ago. When you train and gain some experience, it will take just a few seconds to go through all these 14 steps and enter a trade.
A trader spends most of the working time on the price chart analysis. You will learn how to analyze the price chart to make the most of your trade from the next training articles.
I will explain the basics of the support and resistance levels, how to calculate your profit targets, and protect your trade from a loss. I wish you profits and hope this article was helpful to you. Continue reading with Litefinance.com...