- 1 The complete guide for Olymp Trade forex traders
- 2 The forex market overview
- 3 Forex trading as a way to generate profit at Olymp Trade
- 4 A few steps you ought to follow to master forex trading at Olymp Trade
- 5 How to move to the live Olymp Trade account
- 6 Summary
The complete guide for Olymp Trade forex traders
Olymp Trade’s offer includes the foreign exchange market. It consists of trading two currencies called currency pair. Basically, one can buy a particular currency for another one.
The forex section on the Olymp Trade platform includes 12 indices, 28 currencies, 2 metals, 5 stocks and 9 cryptos. Thanks to such a variety you can trade for 24 hours 5 days a week.
I wrote this guide for the beginners who wish to start trading on the forex market.
The forex market overview
The foreign exchange market, FX in short, is about buying one currency for another. So the currencies come in pairs. The value of a currency in relation to the other is under constant change.
The change results from supply and demand. These, in turn, are largely driven by international trade.
Let’s say, for instance, that an importer from Australia wish to buy some goods from Japan where the currency is JPY. So the Australian needs to convert his AUD to JPY to enable the trade. The demand for JPY will be greater when more importers from Australia buy with JPY than those from Japan buy with AUD.
Following the simple demand and supply law, the higher demand for JPY will increase in value against AUD.
Now, if you want to be a forex trader, your task will be to speculate on the fluctuations of the price caused by changes in demand and supply for the two currencies.
Using different words, you have to determine whether the value of one currency against the other will rise or fall in the specified time.
When you see AUDJPY is 78.62550 which indicates that you may purchase 1 AUD for 78.62550 JPY, your task is to predict will this price go up or down. Then you just click the right button. You buy when you speculate the price will rise, and sell when you think the opposite.
In contrast to trading options, you do not define the expiration time. Here, you open a trade and it stays active until the specified price is met, or you just close the trade. There will be more about it later on.
Forex trading as a way to generate profit at Olymp Trade
Trading forex at Olymp Trade is quite a good method to generate profit. But you must be aware of the risk. And a big loss can even deplete your account. Therefore, you should always analyse the market first, choose a currency pair that is stable, apply the right strategy and money management methods.
Good news is that Olymp Trade’s prices are in general rather accurate on the FX. You get access to various indicators and charts that are designed to help you in the market analysis.
Furthermore, Olymp Trade offers a pretty intuitive forex interface. There is also a short video on trading forex available on the website.
And below you will find simple steps to follow when you are fond of the forex market.
A few steps you ought to follow to master forex trading at Olymp Trade
The first thing you need to do is opening the account with Olymp Trade. It is free of charge and you get 10,000 replenished virtual currency to practise on the demo account. You can use this account whenever you want to try a new indicator or a new strategy.
Registering is really easy. You will also find a sign-up form in the right-bottom corner of the Olymp Trade Wiki website. Just fill the details and choose the currency. You will receive an e-mail from Olymp Trade to confirm your registration.
How to start
When you are already logged in, in the right-top corner next to the name of the asset currently displayed you will find a small arrow. It shows a drop-down list of all the instruments provided by Olymp Trade. You need to choose Forex. Then you can select currencies and the last thing is to choose one pair.
Forex trading interface
The interface is quite intuitive but it is always a good idea to check it out before starting trading.
I placed here a picture of it with several major features.
- Main menu. From here you can go to your account details, deposit or withdraw money, open trading platform, educational resources or blog, get some information about the company and many more.
- Help button where you will find some basic educational material, virtual assistant and the information on how to get in touch with the support team.
- In settings, you can change some platform features so it suits better your needs. You can, among others, choose the language, colour or the functions you wish to be displayed.
- Currency pair that is currently showed on the chart and access to all other assets.
- Four different chart types: area chart, Japanese candlesticks, Heiken Ashi and bars.
- Drawing tools and technical indicators.
- Candles interval.
- Investment amount.
- The multiplier that provides leverage in the trade.
- Take Profit and Stop Loss. You can define the amount of profit or loss at which the trade will be automatically closed.
- Buy and Sell. To open a transaction you need to click one of these two buttons. If you predict the currency pair price will go up, you select a buy trade and when you think the price will fall, you open a sell trade.
Performing a forex trade in 4 steps
- Decide what currency pair you would like to trade.
- Select the type of chart and indicators.
I usually choose the Japanese candlesticks chart with 5-minute interval candles. Remember, that you do not need to use indicators all the time. You can also trade with the candles only.
- Set the investment amount, choose a multiplier and decide on the amounts for take profit and stop loss.
The amount you wish to invest is strictly connected to the money management strategy you use. Anyway, I always recommend not to put too much money on a single trade. Start with 1 to 5% of the whole account balance. Apply this rule also while trading on the practice account. You may ask why not to try bigger sums when there is no risk involved. The answer is that the demo account should serve as the training field. It has to prepare you for real money trading, it also should exercise your patience and trading skills. This is why you should use it as you would the real one. A multiplier is a great tool that can significantly increase your winnings. You have to be, however, careful using it, because it will increase your losing amount as well.So an important thing when trading forex is to set take profit and stop loss. This way you will protect your account against too big loss. The transaction will be automatically closed when a certain loss will be incurred. On the other hand, it will be also closed when a predetermined profit will be gained.
- Buy or sell.
Now it is time to decide what direction the market will go. You will hit the buy button when, after scrupulous analysis, you predict the price of the currency pair to rise. Choose a sell trade when the signs are telling you the price will go down. Additionally, you can choose to close the trade at any time. When you hover the mouse over your opened trade visible on the chart, you will see at what cost you can close the transaction. Another way is by clicking the opened trades on the right side of the platform. You will find the close button also there. Think it well through, though, as sometimes it is better to wait. Especially, when you set the take profit and stop loss features.
Using take profit and stop loss to your advantage
To illustrate effective using of the take profit and stop loss, assume you invest $100.
The currency prices might run 100% in both directions. It would be great for you if your expectations were correct. But what if you made a mistake and the market went against your trade? It is likely that you will lose all the money.
One of the basic rules in trading every professional know is to protect your money in the first place. It means you should focus on saving what you already have before thinking of making a profit.
That is why you should always remember to set stop loss. Moreover, the possible loss should not take more than 10% of the investment. With $100 invested, you ought to set stop loss at $90. So when the price drops to $90 the position will be automatically closed.
The same applies to take profit. If your order will generate as much as 10% of the investment amount, it will be closed.
How to move to the live Olymp Trade account
The demo account is there to help you improve your technique, to try new strategies and to practice. Use it as much as you like, but at some point, you should move to the live account because you are not going to make money on the first one.
First, you will have to log in to the Olymp Trade account and change to a real account. Then, you hit the deposit button and choose the method of paying. After that, you simply follow the instructions on the screen and fill the necessary details.
Verification is required to comply with the regulations against money laundering. Besides, it ensures that your account is secure against unauthorized activity.
In order to verify the account, you will be asked for some of your personal details like your ID, phone number or address confirmation. When the process will be finished, you will receive an e-mail from Olymp Trade with such information.
Trading on the foreign exchange market gives you the opportunity to make some money. In options trading, your profit is a fixed amount. Here, it becomes higher as the market progresses in the right direction.
Keep in mind the main trader’s rule to protect your money. Do not forget to set a stop loss so the huge loss will not affect your account.
Is forex something you wish to try for yourself? Or maybe you are already forex trader and want to share some thoughts with us? There is the comment section where you can write about your experiences. We are here to listen!
Best of luck!
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