Every trader is curious about one question: How to make money trading on Forex or any other market?
As a rule, prices do not stand still. In our everyday life we often watch a price for a certain product increasing, decreasing or remaining at the same level with minor fluctuations now and then. These movements can be defined as trends, which in their turn are divided into several types.
” When the price is increasing, it is an upward trend, when it is decreasing the trend is downward. ”
If the price is steady we are talking about sideways movement. The above-mentioned price behavior is exactly what gives you an opportunity to make gains.
What should you do to make a profit from a price increase? First of all, you should buy a financial instrument, or an asset, which is rising in value. Later, when its price increases, you should sell it. The difference is your profit. If an asset has already started to fall in value, you should get rid of it as soon as possible and sell the asset at a higher price. Afterwards, you may buy it again when the price is lower.
How to sell something you do not have? This is a more difficult question which takes a special approach. We will definitely revert to it in the following tasks. Now let us consider the actions which have already been mentioned. The buying of an asset succeeded by its further sale is called long position, while the initial sale of an asset with the following purchase is called short position.
We hope that you had read carefully the user guide when you installed the MetaTrader platform. Now we are going to run this software to study the material more thoroughly and pick up some practical skills.
Open the program and choose a chart window. It is not of major importance which one you choose.
” Moving over time, the price registers different points in a certain time frame. ”
The time frame can range from one minute to one month. The key points are opening price, high, low, and closing price.
Opening price is the first price of an asset in the current period (hour, day, week, month).
A High is the highest price of an asset in a particular time frame.
A Low is the lowest price of an asset in a certain time frame.
Closing price is a final price of an asset in the current period. This figure is most frequently used in analysis and is considered to be of the greatest importance.
There are many different ways to plot price movements on a chart. We offer you three most widespread methods.