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How To Get Started In Forex Trading

Alice

New member
Are you interested in gaining forex knowledge and learning how to trade? If yes, you’ve come to the right place. Here we discuss what forex trading is and how you can get started.

What is forex trading?

Forex refers to “foreign exchange”. Forex trading is the process of trading in foreign currency to leverage the differences in value between various currency pairs.

Benefits of trading in forex

Forex trading is a highly lucrative avenue because of the following reasons:
  • Forex has evergreen demand, making it very profitable.
  • It’s one of the comparatively easier types of trading that beginners can try.
  • This is a market where you can trade 24/7.
  • The forex market is very liquid, making it very easy to enter and exit.
  • This market is globally regulated very well, making it very safe to trade here.
  • There are tons of Forex technology available, which can make your trading experience easier.

Where should you get your forex knowledge from?

The first step to getting started in forex is gaining your forex knowledge. If you’re a college student specializing in finance, you may have a dedicated course in Forex management.

If you’re looking for alternative Forex knowledge and education options, you can easily find courses on platforms like FX Academy, Forex School Online and Platinum Trading Academy. Even platforms like Coursera and Udemy have Forex courses. Typically, you learn about things such as:
  • Dominant economies
  • Currency movements & management
  • Factors which affect economic volatility
  • Technical forex analysis strategies
….etc.

You can also contact your bank for Forex knowledge. Many banks organize regular webinars on Forex trading and teach strategies and tips that their customers can use to trade in forex.

Finally, it’s really important to follow forex blogs, forex performance online and in the paper, and purchase books on forex trading.

Knowing how and where to trade


Before you get started on a forex trading platform, you need to choose a broker to trade with. A broker is a financial services company that specializes in the stock market and forex trading. You can read our article on how to choose the right forex broker to learn how to find the best forex broker for your needs.

This broker will help you set up your forex trading account and commence trading in forex based on your unique trading goals. Many forex brokers allow you to try trading on demo accounts, which are practice spaces where no real money changes hands. Some companies also offer micro cent accounts, where you can start trading in really small values until you get the confidence to trade in larger quantities.

Once you have gotten your Forex knowledge and you have a broker, it’s time to find the ideal platforms where you can trade.

One of the most reputed Forex trading platforms is MetaTrader, which many traders and brokers use. Alternatively, you can also use other platforms such as:
  • Ameritrade
  • Forex Brokerage Turnkey
  • Stock Tracker
Tips for trading in the forex market

Once you complete all of the above steps, you can start trading. But to help you out, we’ve made a list of key tips that you should follow every time you trade in the forex market:

Read the news

Forex performance depends heavily on multiple political and cultural factors of each country. A change in Government, a national pandemic or a natural disaster, or a civil war can affect the value of the country’s currency. These events can also affect the currencies of other countries that have close ties with the afflicted nation. Remember to always keep up with current affairs so you know what’s going on.

Closely monitor currency fluctuations

Even when everything is politically and economically stable, global currencies can change in value continuously. It’s imperative that you start tracking their movement. This will add to your forex knowledge and you’ll have greater clarity about what to trade-in. You can see these values on your stock market website.

Develop a trading strategy

Your trading strategy should allow you to achieve your forex trading goals. This could be high returns, low risks, steady income and so on. Your choice of which trade to make, how often and what trading style you use (such as position trading or forex scalping), depends on these goals.

Leave emotions at the door

Forex trading is for the level-headed. You could lose a lot of money if you allow your intense emotions to get the better of you when you trade. Always be cool, calm, collected and practical when trading. It’s okay if your performance for the day isn’t great. You have plenty of time to make up for the loss. But emotional trading won’t give you positive results.

Add other currency pairs to the mix

All forex traders have their preferred currency pairs. But it's necessary that you not get fixated on just one. That way you’ll never be able to benefit from a different currency that’s rising in value. So, experiment with different currency pairs occasionally. A strong forex knowledge and insight into their current performance will be sufficient to make a positive trading decision.

Keep an eye on your trading position

Always be aware of where you stand in terms of your trading position. This will ensure you’re informed about how the numbers stand at the close of the market. You’ll also know what to do the next day. Most forex trading software gives you complete information about your trading position in the form of a dashboard report.

Don’t listen just to the trends

While forex trends are super important to keep note of, they shouldn’t be your only guide. As you gain more experience in forex trading and your forex knowledge grows, you’ll develop a feel for the market. Pay attention to your instinct and combine it with the technical analysis and trends you learn. Together, they’ll yield the best results.
 
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