Forex beginners guide
What is Forex? Forex is an international currency market, where every participant, even very new to this, is able to generate income by trading on currency price fluctuations.
So how do you earn money on Forex? The information below is presented in the format of a Forex beginners guide, and we have chosen those questions, which we get from beginning traders most often.
Where to trade? Which broker to choose?
This is probably, the most frequent question in our contenders fore the Forex beginners guide. Unfortunately, there are a lot of fraud/scam cases among Forex brokers these days, therefore, it is very important to select your broker carefully.
When choosing your broker, here are some of the criteria that you have to pay attention to:
- Reputation and service quality (order execution, slippage)
- Trading conditions (the less you have to pay in fees and commissions, the more you earn)
- Support (it is very important to be able to receive a reply to any question, especially when you are just starting)
- Trading software (the availability of a phone version of the trading platform I handy)
- Security (very important to make sure that funding, withdrawal and ID verification procedures are adequate)
For a start, we would recommend going for at least $100-$500 of deposit funds, as if you run into a tight spot, you won’t be able to live out a lot of market action before your trades get closed out with a margin call, even with the slightest drawdown.
What do I begin with?
Begin with the basics. Make sure to read or watch some Forex beginner guide or course – those will eliminate the simplest questions. If you run into anything that you don’t understand, you can always Google it up and investigate further.
As for requirements, you only need a computer and stable Internet. By the way, this is a big perk of Forex – you get to work from home!
As for whether to pay for any commercial courses or software, the decision is completely up to you. We do recommend looking into some sort of paid mentoring or Trade Room – those can be very effective.
I want to earn money, now!
First off, don’t be in such a rush. Forex can be tricky and difficult for beginners. The market will go anywhere from you. First, you need to work out your trading plan and strategy, learn how to do this if you are planning to trade manually, or select a good place to invest in, such as automated trading or managed accounts.
Don’t forget, that the main risks are typically a thing due to lack of proper expertise, knowledge, and incorrect money management. Forex is difficult for those who do not invest time into learning it. Before looking for quick and easy bucks, spend some time improving your understanding of the market.
What if I want to invest or use EAs?
There’s a wide variety of different trading systems out there. You can read reviews about some of the most popular EAs in our blog. Subscribe!
A managed account on the other hand, also known as PAMM, is a system where revenue is divided between the investor and the trader. While investors provide funds, the traders use those funds to trade expertly, multiplying the deposit, and receiving part of the revenue as payment for their services.
In both cases, you do not have to trade personally, but retain the ability to control what is happening on your accounts and ability to pause the trading at any point.
What if I want to trade manually. What should I do?
From our experience, learning to trade with average, 5-10% results, is not that difficult. What’s most difficult, is to always keep your composure, and being a self –controlled, disciplined trader, keeping your emotions at bay under all circumstances.
First off, to begin, you will need to install a trading platform (for most brokers, it is Meta Trader 4.)
Regardless, whether you choose to trade automatically with EAs, or if you are trading manually, make sure to delve into how money management works, and how to control your deposit/risk ratios.
One of the most important components of trading manually, is always maintaining a systematic approach. You might want to have a look at our trading strategies section, which covers some of the most common and popular trading tactics, or at least read through this Forex beginners guide.
Trading on your own, without anyone holding your hand, offers much more possibilities. The higher the mastery of an individual trader, the bigger sums of money he can manage, increasing his potential returns from trading. In most cases, predicting an approximate price movement is not that hard, but you have to learn the basics of technical and fundamental analysis, to be able to read your charts and stay aware of the general economic news buzz.
Is there literature about Forex?
There is a big choice of books out there, from some very well known, bestselling authors, which will teach you to use technical analysis, predicting price movement, managing your deposit and managing the psychological aspects of trading. There is a lot of literature both for beginning and experienced traders, so make sure to have a look into that.
We are also planning to post a list of our favorite books in the near future, so stay tuned for updates!
Have a read through some of our newbie and educational articles after you are done with this forex beginners guide – those should give you enough of a head start.
Here are some general recommendations for beginners:
Don’t trade on schedule – your decisions should be timely and mature,
Think of what you want to achieve with each trade in the big picture,
Don’t overload yourself with information,
Don’t read a lot, read what is useful,
Don’t mix trading and academics,
Always remain calm and composed.
The first step is easy!
So what are you waiting for? Go ahead and give it a try on a demo!
The possible profits are unlimited and only depend on your abilities and determination.
Use this chance to delve into the interesting and fascinating world of finance! And remember, all of the knowledge that you will acquire now, will save you money in the future. Never forget to keep moving, and improving your trading skills.