How to Start Trading Forex

In the first part of this series, you will learn how trading platforms work (such as MetaTrader 4), how candlesticks and charts are used, and how to read the information they provide.

You must be looking forward to trading. However, you are also probably aware that your knowledge is still somewhat theoretical. Over the coming videos, we will introduce you to some important terminology that you will be using throughout your trading and put the theory you have been introduced to so far into context. You can refer back to this video and the article that accompanies it whenever you need to clarify something.

The trading platform is a piece of software installed on your computer and it is effectively your command center. You will trade using this software by using it to tell your broker what you want to buy or sell, how much you want to buy and sell, when to take profit if the trade goes well when to take your loss if the trade does not go well. We will teach you how to trade mostly using the MetaTrader 4 platform because it is robust than user friendly. However, keep in mind that different platforms are used by different brokers.

Most trading platforms offer similar functions and you should find it relatively easy to adapt to each of them. You can see that this trading platform contains a chart. This is the visual representation of the price action and we use this for our analysis. It is here that we identify trading opportunities. The vertical axis on the right hand side is the exchange rate. The horizontal axis represents time. These are candlesticks, which are a method of illustrating the price movement and they tell us a certain amount of information. In a 1-min candlestick chart, each candle represents one minute to form. On a daily chart, each candlestick takes one whole day to form.

Each candleestick has a body, shows us the opening price and the closing price. When the candlestick finishes with the opening price above the closing price, then it is represented by blue color. If the candle finishes with the closing price below the opening price, then the candlestick will stay orange. We have wicks above and below to tell us the highest and lowest price during the period that the candlestick represents.