Step-by Step Guide on How to Trade Forex by Forex Expert Carmelo Cerrelli

Trading Forex, on the currency market, can be a exciting hobby as well as a great source of investment income.

Here is a step-by-step guide by Forex expert Carmelo Cerrelli, that will help you learn to trade Forex, so make sure you follow the steps mentioned below in this guide in order to start trading in this huge and lucrative industry.

Step 1: Learning Forex Trading Basics

• Understanding the basic Forex terminology is imperative before you start trading.

Base Currency is the type of currency you are going to spend.

Quote Currency is the type of currency you going to purchase.

• Forex trading simply refers to selling of one type of currency in exchange to purchase another type of currency.
• It’s imperative to read a Forex quote which has two numbers:

The bid price on the left

The ask price on the right

• You must carefully decide what currency you want to buy and sell.
• Learning how to calculate profits is very important.

Step 2: Opening an online Forex brokerage account

• It’s imperative to research different brokerages in order to choose someone with vast experience in this industry or someone who has been in the Forex trading industry for 10 plus years, as the experience signifies that the company has the required experience, also knows how to take care of its clients.
• You must always remember to request information about how to open an account. Online Forex account opening will give you two options:

In a personal account you can execute your own trades.

In a managed account a broker will execute trades on your behalf or for you.

• It’s imperative to fill out the proper paperwork. There are two ways you can ask for the paperwork: by mail or simply by downloading it in the form of a PDF file.
• Now at this step you can simply activate your account. Your broker will email you the link to activate your account, in order to get started with trading.

Step 3: Focuses on Trading

• You must always analyze the market thoroughly.
• It’s imperative to determine your margin, which should depend on your broker's policies.
• Now at this step you can simply place your order.
• It’s imperative to watch your profit and loss in addition to not getting too emotional, simply because the Forex market is very volatile and you will see a lot of ups and downs.
• What matters in the end is that you must continue doing your research and stick with your trading strategy. Sooner or later, you will see profits.

Important Forex Factors From Forex Professional Carmelo Cerrelli

Here are important Forex Factors from Forex professional Carmelo Cerrelli:

Primary Factors

• Growth - Changes in the country’s Gross Domestic Product or GDP that gives a useful measure of growth. A growing economy tends to strengthen a currency.
• Rates - Short term interest rates affect Forex rates.
• Trade - The country's trade and current account balance can have an impact on Forex rates.
• Economy - The general economic outlook for one country in relation to that of the other country can affect Forex rates.

Economic Factors

• Interest Rates - A key element in evaluating one currency against another. If interest rates are increased, the currency of the country becomes more attractive against other currencies offering lower interest rates.
• Inflation
• Trade or Currency Account Balance - A trade or current account surplus or deficit will either favor the currency rate for the country with a surplus or weaken the rate for the country with a trade deficit.
• Credit - Another economic factor that will influence exchange rates directly. If a country has borrowed excessively large sums of money from other nations or from the IMF, its currency will surely reflect the serious level of debt the country is in.
• Gross Domestic Product (GDP) - Represents the total of goods and services a country produces and reflects the level of growth in the economy.
• Commodity Prices can also affect exchange rates.
• Employment Data - If a country has an increasing percentage of its citizens employed that will tend to strengthen its currency.
• Industrial Production - A strong industrial base will tend to strengthen a nation's currency.
• Retail Sales - A strong retail sales figure is generally favorable for a currency and the country's overall economy.
• Consumer Price Index (CPI) - A measure of inflation.

Other Important Factors

• Supply and Demand Effects - Substantial flows of capital into one currency and out of another currency, can shift the exchange rate for the currency pair to favor whichever currency sees the higher demand.

• Monetary Policy - Because of the effect of monetary policy on interest rates, this makes up an important element in the valuation of a currency.
• Political Influences – It’s widley known that the countries with stable governments tend to have their currencies favored more over those countries with unstable goverments or countries having less favorable political situations.
• Commodity Price - The prices of key commodities like gold and oil tend to affect the valuation of the currencies of their primary exporters and importers.

According to Forex professional Carmelo Cerrelli, it’s imperative to have the knowledge of the above mentioned Forex Factors.

The Core Benefits of Trading Forex by Forex Professional Carmelo Cerrelli

The Forex or currency market is a market in which currencies are traded and it is the largest and most liquid market in the world with an average traded value that exceeds $5 trillion per day. The Forex market includes all of the currencies in the world.

According to forex professional Carmelo Cerrelli, there are many benefits of trading Forex.

Market Size

The Forex market is the largest financial market in the world.

Ease of Entry

You can get started in the currency market with a small account as well. You don’t need tons of money to start making great returns on your investments, also anyone can take advantage of the benefits of the currency market.

Profit Potential

The currency market has plenty of profit potential. You can make money in the currency market whether currencies are going up or down.

24 Hour Market

Forex trading operates 24 hours a day, five days a week. Since the Forex market is worldwide, you can trade Forex as long as there is a market open somewhere in the world.

High Liquidity

Due to the substantial size of Forex market, it is also extremely liquid. Liquidity is the ability of an asset to be converted into cash quickly and without any price discount. In Forex, liquidity is high which means you can move large amounts of money into and out of foreign currency with minimal price movement.

Low Transaction Cost

In Forex, typically the cost for a transaction is built into the price. It is called the spread, which is the difference between the buying and selling price.

Increased Leverage

Forex brokers allow traders to trade the market using leverage, which is the ability to trade more money on the currency market than what is actually in the trader’s account. It gives the trader the ability to make nice profits while at the same time keeping the risk capital to a minimum.

Profit Potential

In Forex, there is no restrictions for directional trading, this means if you think a currency pair is going to increase in value you can buy it or go long. In the same way, if you think a currency pair could decrease in value you can sell it or go short.

Can be Your Side Earning

Forex trading can be done personally on brokers and this can be your side earning source.

No Commissions

When you trade currencies, you never have to pay a sales commission.