Forex Trading Tutorial

Forex Trading Tutorial

Every day is a new day to learn. Our website is giving education to forex learners. This content is a forex trading tutorial. We will disclose how to place a trade and some important terminologies of forex trading. Forex trading involves the buying and selling of currencies. 

Forex trading Tutorial step-by-step

Here is a trading tutorial by which you can learn the basics of trading.

1. Download software 

In the beginning, do not go directly to the live account. After downloading, open a demo account and start trading with virtual cash. The demo account provides you the basic and important features.

2. Open demo-account

In the beginning, do not go directly to the live account. After downloading, open a demo account and start trading with virtual cash. The demo account provides you the basic and important features.

3. Market Review

Now review the market. Before going live, you have an estimate of the money you want to invest. At initial stages, try to trade on currencies. Check the affordability and analyze the reward ratio of those products you want to trade in the future. 

4. Understand the terms

There are a few basic and integral components. You should clear your concepts about them before stepping into a trade.


Bid and ask are two important terms of forex trading.

  • The bid is the price at which you can sell a product. It is written on the left side. Bid indicates how many traders are ready to pay for your instrument.
  • On the other hand, ask is the price at which you can buy an asset. It is written on the right side. Ask price points out the traders that are willing to sell it first.


Pip is the abbreviation of the percentage in point. A pip is the smallest change by which fluctuations occur in a currency value.

In the major currency pairs, it is counted by the last value that is the fourth decimal place of the currency. It is equal to 1/100 (fractional part) of one percent that is 0.0001. Pip also covers the ratio of profit and loss.


The Spread is the difference between the bid price and the asking price. In forex, it is of two types.

Fixed spread- It remains the same without concerning the market movements. Mostly deal-desk brokers offer fixed spread.

Floating Spread- It is also known as the variable spread. Floating spreads fluctuate according to the market changes (change in the bid/ask price).


It is the initial amount on which your trading is based upon. Leverage is like a loan. To illustrate to you, there is an example. Do not take it seriously (as the gold price is never too low). The price of 1-ounce gold is $100. You can buy the lot just by giving the advance amount of $1. The ratio is 100:1. Unfortunately, retail traders are destroyed several times by availing high leverages. That is why high leverages are restricted by FCA that is 30:1.


Margin is a capital that you have to maintain a specific level prescribed by your broker to hold the underlying asset. When margin decreases due to a decrease in the price of the instrument, the broker gives you a margin call to bring your margin level back to 100 percent by injecting new capital. Otherwise, your instrument or holding position will be liquidated without further notice by the software or broker in case of a continuous drop in price levels.


It is the actual size of the trade. The volume is measured by a lot. For example, if you want to trade in gold. You can choose your lot size according to your portfolio worth or trading strategy.

1 ounce, 100 ounces, and 1,000 ounces are available lots for gold. Nowadays, micro lots and mini lots have been introduced to traders with smaller currency values.

4. Trade

After choosing your instrument, go ahead with trading. Trading involves two types of action. It can be buying of a product or selling it. 


Just buy the product at the exchange rate. Then you just had to wait for the rise of the value. As the value goes up, close the trade, and get your profit.


The term selling is also known as short selling. In this process, you sell an item first and then buy it. You have to borrow this product from your broker or exchange. When the value of the product drops, you are in profit.

5. Slippage

Many brokers have been the victim of slippage. Slippage is actually the difference between the expected price and the actual price at the time of execution.

There is a minimum difference of 5 pips (increase or decrease) than the expected price. Try to sustain a difference of 7-8 pips from your expected price.


After following all the mentioned steps, you will be able to go live and fund your trading account. Forex trading is not only restricted to buying and selling currencies but also strategies, management, and professionalism.

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