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Managing A Forex Account - YouTube
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hello and welcome to ZuluTrade in this
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video we will show you the basics of
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managing a Forex account including how
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to place a trade how to set up a stop
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loss which helps you protect your margin
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and finally how to place a limit order
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to secure your potential earnings so
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you've decided to invest in Forex you
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chose a broker and open an account with
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them possibly through ZuluTrade but how
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do you actually open up a position to
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see this in action we are going to use
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the Zulu trade platform which can be
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accessed by selecting the trade tab at
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the my account page on this table there
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are three columns currency sell and buy
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the currency column lists all the
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current pairs supported by the system
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from here you can select the pair that
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you are interested in trading a couple
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of terms before we move on when dealing
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with currency pairs in forex trade the
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first currency is often referred to as
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the base currency and the second
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currency is often referred to as the
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quote currency after you have selected a
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currency pair you will determine if you
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want to sell or buy the base currency
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using the quote currency you buy a pair
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if you believe that the base currency
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will appreciate or go up relative to the
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quote currency and you sell a pair if
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you think the base currency will
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depreciate or go down relative to the
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quote currency now as you will notice by
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looking at the buy and sell columns of
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the chart currencies typically have two
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prices under the sell column we find
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what is called the bid price this is the
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amount at which the market will buy one
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unit of the base currency using the
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quote currency under the buy column we
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find what is called the ask price this
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is the amount at which the market will
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sell one unit of the base currency using
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the quote currency the bid price is
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always smaller than the ask price and
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the difference between the bid and the
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ask price is popularly known as the
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spread to better understand this let's
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look at an example of a trade for the
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pound US dollar
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err the bid price is 1.6 3 4 1 4 and the
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ask price is 1.6 3 4 5 5 if you want to
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sell pounds you click the price on the
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cell column and you will sell pounds at
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one point 6 3 4 1 4 if you want to buy
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pounds you click the price on the Buy
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and you will buy pounds at one point 6 3
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4 5 5 although this is enough to replace
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a trade there are still some more
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advanced options that you can use to
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adjust and manage your position let's
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take a look at them a market order buys
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or sells the currency pair immediately
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at the current rate determined by the
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market and it therefore cannot be
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changed
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as you can see the market box has
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already been checked this is because all
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transactions are by default market
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orders by deselecting the box you can
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place what is called a limit order a
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limit order is an order placed to buy or
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sell a certain predetermined price the
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limit order is typically based on two
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variables price and duration let's take
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a look at an example let's say that the
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euro US dollar pair is currently being
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sold for 1.2 zero-five-zero euros to the
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dollar but you only want to buy euros if
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the price reaches one point two zero
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seven zero you can either sit in front
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of your monitor and wait for it to hit
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one point two zero seven zero at which
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point you would execute a market order
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or you can set a buy limit order at one
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point two zero seven zero if the price
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goes up to one point two zero seven zero
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the platform will automatically execute
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a buy order at that exact price in this
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field traders can determine the size of
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the order in lots by default all orders
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are set at one lot a stop-loss order
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tells the system to close a position
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when it reaches a certain price a
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stop-loss order is designed to limit a
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traders potential loss for example
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setting a stop-loss order for 10 percent
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below the price you paid for the trade
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will limit your loss
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to 10% a stop-loss order remains in
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effect until your position is liquidated
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or until you cancel the stop-loss order
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for example you bought the euro US
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dollar pair at one point two to three
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zero to limit your maximum loss you set
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up a stop loss order at one point two
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two zero zero this means that if you
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were wrong and the euro US dollar drops
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to one point two two zero zero instead
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of moving up the platform would
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automatically execute a sell order at
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one point two two zero zero and close
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your position for a 30 pip loss on
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ZuluTrade all positions have a default
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stop-loss at five hundred pips you can
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customize this value at the specified
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field the opposite of a stop-loss action
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can also be executed that is you can set
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a stop limit to close your position
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after it has reached your desired profit
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level while closing a position while it
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is going up may sound counterintuitive
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the very essence of forex trading is not
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only to make pips but to keep them so
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terminating a trade after it is reached
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a desired level may protect you from
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losing your gains in case the market
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takes a sharp turn let's assume that is
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in the previous example you bought a
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euro US dollar pair at one point two two
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three zero if you think that a
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reasonable gain from this trade is 40
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pips you can set a limit at one point to
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two seven zero this means that if you
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were right and the euro US dollar pair
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rose to one point two two seven zero the
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platform would automatically execute the
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order at one point two two seven zero
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and secure your 40 pip gain even if
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later the position falls lower than this
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level on ZuluTrade all positions have by
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default a stop limit at 500 pips
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like the stop-loss you can also
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customize the stop limit at the
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specified field we hope this video will
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assist you in managing your forex
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trading account successfully if you are
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interested in the opportunities of forex
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Trading but still feel a little
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uncomfortable executing your own trades
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don't despair you can always use the
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Zulu trade platform to select experts
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that can make the difficult decisions
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for you for free for more information on
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how the Zulu trade service works you can
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find us at WWE trade comm
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