How To Trade Forex/Synthetic Indices
To start trading this markets, you’ll first of all need a background knowledge on it, How it works and what it entails.
The very first step is to learn how to trade either by signing up in an academy or having a private tutor. Your private tutor can be someone who is an expert in it.
You’d want to read books too. Read a lot of books that are self explanatory then implement what you’ve learnt.
With your forex knowledge, you’ll do just great trading synthetic indices because the concept are very similar. There isn’t much difference between Forex and synthetic indices. The difference is their type of market. In forex, currency pairs are traded whereas, in synthetic indices markets like volatility, crash and boom are traded. This is a very distinct feature you can use to differentiate the two types of markets.
Steps On How To Trade Synthetic Indices.
• Download the MetaTrader 5 app on your phone.
• Sign up with a broker. Deriv is the only broker you can trade synthetic indices with. As well as Forex.
• If you’re a newbie, do well to start with a Demo free account to practice. Although you’ll have $10000 to practice within a Demo account, you can’t cash out all the profit you’ll make.
•After signing up with a broker, you’ll then create a Deriv account with your details.
• Create a Dtrader account to trade synthetic indices.
• Go back to your MT5 app, click on “settings” and add a new account. Type “Deriv” and click it. Use the details you used to open your Dtrader account and you’re good to start.
Click here to watch an explanatory video on forex
A forex broker is a financial services company that provides traders access to a platform for buying and selling foreign currencies. They also help you execute your trade as well as manage risks
2. Lot Size
Lot size is the minimum amount you’ll gain or loss with every rise or fall of a candlestick. With the right risk management and market going in your favor, a large lot size will have you raining in blues.
While trading the Forex market, you’ll know that the lot size is uniform, with synthetic indices it’s very crucial to check the market details to know the minimal volume(lot size). Don’t just assume else you’ll be in great loss.
Leverage aims at letting you trade with more than you have deposited. It is seen as a loan you borrow from your broker which you’ll payback at the end of each trade.
Pip which represents Percentage In Profit is the tiniest increment that an exchange rate can make. The Pip is located in the fourth decimal of most currency pairs
5. Stop Loss
Stop Loss is a form of risks management that allows you to stop a trade when you’ve made a certain amount of loss. This is where the help of a broker comes in, even while you’re unavailable, the broker closes your trade and take a loss at a certain price point. It is sometimes denoted as SL.
6. Take Profit
It helps you to close a trade and take the profit at a certain price point. It is denoted by TP.
All these knowledge helps you to minimize the rate of risks and maximize your profit when properly executed.