By learning how to start trading on Forex, you can open up a new source of income for yourself. But first, you need to learn how to trade and make profits from it. In this OctaFX trading guide, you will learn how to start trading intelligently and maximize your profits in the long run.
1. Learn about Forex Trading
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If you’re a beginner, there are some concepts and rules you should be familiar with. We’ve covered them in our How to Trade Forex article. You can also read our education section. This will help you expand your knowledge about the market in general and our services in particular. If you want to practice with virtual funds before switching to real trading, you can open an OctaFX demo account. Let’s start with some important Forex concepts.
Margin is the amount of money required to open new positions and maintain open positions. This varies for each instrument. You can use our trading calculator to find out your required margin. If you do not have sufficient funds (for example, if your floating loss becomes too high)—you may be asked to top up your account to maintain your order. This phenomenon is called a margin call.
A pip is a standardized unit of price change. 1 pip is calculated from the second to last digit. For example, when the price of the EUR/USD currency pair changes from 1.11634 to 1.11645, it means that the price changed by 1.1 pips. For the USD/JPY currency pair, which has a 3-digit price, a change from 123.857 to 123.864 means that the price has increased by 0.7 pips.
Leverage reduces margin requirements, the amount needed to maintain a fixed position, and helps you open orders in larger quantities than your balance would otherwise allow. It is important to note that the higher your order volume, the greater your profit or loss.
Let’s say you have a trading account with 500 USD and leverage of 1:500 applied. You decide to open a position for 1 lot (100,000 units) on EUR/USD when the price comes to 1.13415. The margin required for this position is 226.83 USD, which is approximately half of your funds. The movement of each pip is then equal to 10 USD. Therefore, the price would only need to fall to 1.13145 to lose almost all the money in your account. If you open a position for 0.5 lots, each pip will cost only 5 USD. In this case, if the price drops to 1.13145, your loss will be 135 USD.
How much leverage should you use? It depends on the level of risk you are willing to take. Higher leverage means higher risk and reward. You can change it anytime after learning.
2. Opening an OctaFX account
With an OctaFX account, you can access the foreign exchange market and start trading.
First, you need to enter your name, email, and a secure but easy to remember password. You also need to specify your experience in trading. This way, we will offer you more useful content. After clicking ‘Open Account’, open your inbox and confirm your email.
Next, you will have to provide more information about yourself. After entering your country, phone number and birthday, press ‘Continue’ and select the mode of creating a trading account. ‘Standard’ mode allows you to create an account with a single click, while Custom lets you choose between OctaFX Demo and Real accounts, select the trading platform and leverage. By default, this will be a real MetaTrader 5 account with maximum leverage.
If you are just starting out, a demo account is a better option than a real one. This allows you to practice trading without risking your funds. You don’t need to make any investments—simply specify the amount of simulated funds you want to add to your account after creation.
Once you register, you will receive an email with your profile and trading account credentials. From there, you can log in to your profile to manage your funds, receive bonuses, and participate in our promotions, or start trading immediately in the web terminal.
Which trading platform is right for you
We offer three trading platforms: MetaTrader 4, MetaTrader 5 and OctaTrader.
MetaTrader 4 is the older version of MetaTrader. It is not as powerful as its newer counterpart, as it offers a limited amount of tools and tools for trading. However, such limitations make the platform perfect for beginners and traders who prefer to use external tools.
MetaTrader 5 is the new version of MetaTrader. It offers a highly customizable interface and a wide selection of tools. Another strength of the platform lies in its professional tools, such as Level 2 market data, partial fill, a full-size tick chart, and an economic calendar.
Keep in mind that the MetaTrader apps are blocked on iOS, so you may have to use their web or desktop versions. You can download the OctaFX trading app and trade on OctaTrader.
OctaTrader is our built-in trading platform. It has the best features of the other two, offering a modern interface that is easy to learn and tweak along with a full selection of tools. With OctaTrader, you can trade and manage all your accounts in a single web or mobile app.