When it comes to business, you can’t just dive in with no knowledge and make huge bucks out of it. You first gather all the relevant information and then move to the next step. So, you need to do when starting trading forex.
Earlier we have understood some basics about forex and stock trading. We also learn some differences between the two trading markets. And found that forex trading is relevantly easier to understand and get started. And it’s time for us to start with a plan of action.
Learn the Basics of Trading Forex
You don’t necessarily have to join some institute to get started. There are plenty of online forex trading courses, both free and paid. Forex trading apps guiding you with the basics of the market. And tons of well-written books.
If you choose to register or join an online course, beware of scammers. They’ll tell you to join their course and in no time you’ll be making ten grand or more. Don’t fall for them.
I recommend joining free courses on YouTube first to get a better idea if this is the right investment place for you. Once you’re clear, you then can enroll in some paid courses.
Once you have a good hold on the basics of forex trading, the second step is your strategy.
In this step, you’re going to plan when you’re going to buy or sell the currency. And how you plan to face the risk related to this financial market.
So in the beginning you can be as simple as you want to be. In this phase, you might make some losses (which is meant to happen in every business). But as you gain experience, you’ll learn to minimize the risk of losing.
With time you’ll get to build a great strategy. You’ll be able to understand the trends of the forex market and predict the trends based on some well-known platforms in this market.
One more thing to add here is that you can always test your strategy by trading on some demo accounts. Demo accounts usually give you a real-time market picture of this financial market. And they’re one best way to learn and plan ahead.
Choosing the Best Forex Trading Broker
Now that you’ve learned the basics and have a strategy to proceed, it’s time to choose the broker. A broker helps you trade the foreign currency for, perhaps a little commission.
You must have seen some forex trading apps when surfing Facebook or YouTube. These are usually the brokers. Since everything is going digital, you can trade in this financial market without having to go to an actual in-house broker. Rather you find the best broker app (forex trading apps), sign up, and start trading.
Again there are some fraudsters not working for your best interest. They would give you sweet dreams of making loads of money. They’d ask to invest the money and would want you to lose your cash.
One key point to see if a broker is a fraud is if they ask to give you huge leverage. In simple words, for example, they ask you to invest $500 and trade in a million worth of currency. This is huge and usually, no one takes this huge risk.
When choosing a broker, you’d learn that some brokers charge a commission and some don’t. Broker in the forex market usually makes their profits from the spread. Spread is the difference in the value of buying and selling price of a currency.
Also, check if that broker is regulated by some authority or not.
We have talked about this earlier. This is the one account that allows you to play with the dummy cash as you like. If you’ve followed the basic procedures and done the maths, you’ll win using this demo account. And if you’ve have succeeded in the demo account, chances of winning in the real account are very high.
Real Forex Trading
It’s time to get on your feet.
You’ve got the basics, you have a strategy, you know your broker and have tested yourself using demo accounts. It’s time to start investing some real cash and trade with it.
But don’t get too excited. Don’t go too easy this time. This is your real cash and it needs serious attention. Start with low leverage initially. Be very active on and review the trends with each passing day.
There are some apps that would help you analyze and discuss the trends of the market. Use them to become an expert.
These are some very basic tips for a beginner forex trader. You start with knowledge-gathering, move up to making a strategy using experts’ guidance, choose the best broker, test your guts with demo accounts, and then start trading with real cash.