It is important that you take a very tempered approach and have a conservative outlook when you are trading the Forex market with real money.
It is important that you analyze your trading position before taking a trade. You also need to be clear on your entry, exit and stop loss price. For most traders, the entry is the easiest part but they start to shiver when it comes to placing the trigger when the price reaches either the stop loss or the target price. It is important that you set these prices as soon as the trade starts so that there is no second guessing when you are in the trade.
To be able to take a position in the Forex market you need to know how to calculate the profits and the losses. Most of the trading platforms this for you but you want to learn how to do this yourself so that you are able to place your target and stop loss at the correct price. This will also let you manage your trade positions.
Bid Price / Ask Price
Bid price andAsk price are two other important things that you need to know when you are trading in the Forex market. EveryForex pair has two quotes and there is always a difference in the price quote that the broker offers to you. The broker will give you two prices which is the bid price and the asking price. These are the sell and buy prices.
Suppose that there are two prices of EUR/USD and they are 1.35 and 1.34. The first is the selling price and the other is the buy price. This means that the selling price is the one at which the broker is ready to sell and the buy price is the price at which the broker is ready to buy from you.
It is important for you to know these because the difference is what will impact your profit and loss price and this is the difference between the entry and exit price. If you end up getting confused on the exact level of entry and the level where you exit then this does not let you plan your trade strategy. Trade management is very important and to do proper trade management you need to know your exact entry and exit price. Read review on proper trade management.