All you Need to Know to Start Trading FX with Tickmill

When you decide to delve into the world of foreign exchange trading, it’s imperative to choose the right broker and have a solid understanding of the dynamics that drive the currency markets. In this comprehensive guide, we’ll unravel the complexities of Forex trading, beginning with its definition and moving into the intricacies that traders, especially those partnering with Tickmill, should be familiar with.

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What Forex Trading is and How it Works

Forex, short for foreign exchange, is the colossal playground where currencies dance. Boasting a staggering daily trade volume of $6.6 trillion, the Forex market dwarfs traditional stock markets, like the NYSE which only musters a daily volume of $22.4 billion.

Here, Central Banks play with Investment Managers, Hedge Funds tango with Retail Traders, and Corporations jostle with Brokers. The intriguing fact is, the vast majority (about 90%) of those participating are currency speculators. Their objective? To exploit minute fluctuations in currency prices.

However, if you’re new to Forex, you might wonder, “What causes these fluctuations?” Supply and demand, geopolitics, economic indicators, and even natural disasters can play a part. And when millions of traders enter the market, the liquidity – a term that refers to the volume of money in the market – balloons, making it even more attractive for trading.

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Currency Markets and Currency Pairs

When you trade Forex, you’re not just buying or selling a single currency, but a pair. The value of one currency is always determined in relation to another, forming a ‘pair’. For instance, in the EURUSD pair, EUR is the ‘Base Currency’, and USD is the ‘Counter Currency’.

The gap between the buying (Ask) and selling (Bid) price of a currency pair is called the ‘spread’. This spread is measured in pips, a critical term in the Forex lexicon. When trading with Tickmill, traders can expect competitive spreads, ensuring they get the most out of every trade.

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What is a Pip and Why is it Important?

A Pip, standing for either “price interest point” or “percentage in point”, is a standardized measure of the smallest price move a currency can make. Think of it as the DNA of Forex price movement. For most currency pairs, a pip is 0.0001, but for others, especially those involving the Japanese Yen, it’s 0.01.

While this might sound technical, understanding pips is vital for two reasons:

1. Trade Measurement: Knowing how much a pair has moved in pips helps traders understand if their strategy is working.
2. Profit and Loss Calculation: The number of pips won or lost determines the trader’s profit or loss.

Tickmill ensures traders have access to tools that simplify pip calculations, aiding in effective trading decisions.

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Leverage and Margin in Forex Trading

One of the reasons why Forex is so alluring, especially to retail traders, is the concept of ‘Leverage’. It’s like a magnifying glass for your trade. If you have a leverage of 1:100, a $1,000 deposit allows you to control $100,000!

Sounds tempting, right? But there’s a catch. Just as leverage amplifies potential profits, it magnifies potential losses. That’s where ‘Margin’ comes in. Think of margin as a good faith deposit or an insurance against potential losses.

It’s pivotal to remember that while leverage can be a powerful tool, it must be used judiciously. Tickmill provides educational resources to ensure traders understand and use leverage responsibly.

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Forex Trading Platforms, Apps, and Websites

The digital era has transformed Forex trading. Today, you can trade, get news updates, analyze charts, and access expert analysis on-the-go, thanks to a suite of trading platforms and apps.

Tickmill offers its users the popular MT4 platform, known for its user-friendly interface, advanced charting tools, and automated trading capabilities. Moreover, their mobile app ensures that traders can keep a tab on their trades wherever they are.

Additionally, there are many educational and news websites that provide invaluable information to traders, helping them stay updated and make informed decisions.

In conclusion, diving into Forex trading is a thrilling venture, but it’s essential to be well-prepared. With a broker like Tickmill, traders not only get access to the vast Forex market but also a partner committed to their success. With their advanced trading platforms, competitive spreads, and a plethora of educational resources, both novices and seasoned traders are set for success.