Trading with Forex has always been popular but with the current economic climate there have been many more Forex beginner turning their eyes towards the Forex trading platform. Forex stands for ‘Foreign Exchange’ and is a heart pounding, adrenaline inducing, currency trading platform that gives ordinary people like you and me the thrill of taking part and having the possibility to earn big money. It got it’s start back in the early 1970’s when floating currencies and free exchange rates were first introduced.
The Forex market is the biggest of it’s kind in the world, trading at up to 2 trillion dollars every single day and is very unique for many reasons. Firstly this is one of the few markets that require very little qualifications and is free from any external control, also it can’t be manipulated in any way which makes it ideal for any Forex beginner. Money that is traded through Forex moves so fast that it’s impossible for any single investor to substantially affect the price of any major currency. There is always willing buyers and sellers for the Forex beginner to look to as unlike any stock that is rarely traded, Forex traders have the ability to open and close any positions within seconds.
The Forex beginner should however know that achieving profits isn’t as easy as some people would like to make out and if you don’t have enough expertise, the right tools or the right guide then they could find themselves with a financial hole in their pocket. Many a new trader has fallen foul of the emotion that comes with the Forex platform and begun chasing their losses, making the financial hole bigger and bigger. This article is designed to give the Forex beginner their starting base so that they may progress up the Forex trader ladder safely and start making money on Forex without falling into the many pitfalls on the way.
1. Research Is Key
Although many the Forex beginner will see research as tedious and mind numbingly boring, it is vital to get a background understanding of how the Forex system works. The Forex beginner needs to learn the platform they are using, the timeframes, the currencies, the lots, how to calculate pips and their value and time zones. These just a few of the basics but to be a true Forex pro there are many more areas that will need to be learnt. The Forex beginner should read and research a lot before investing their savings, they should first improve their skills and add to their knowledge. Start small and grow.
2. Automated Robots Can Help
The Forex beginner is advised not to trade manually to begin with due to the market being highly unpredictable, instead they should try one of the many Forex robots to get started. The reason for this is because Forex robots are often configured by professional traders so that they can accurately predict the markets movements and this means it’s like having an expert showing you when to buy or sell.
There are many free to download Forex robots which are very good however it is always advised to have a look at the paid versions as these our constantly being updated with current data and therefore your robot will always be trading correctly for you. Using Forex robots is not illegal in anyway, in fact there are many major companies using robots and other automatic systems to help them make huge money making decisions.
3. Get A Demo Account
Almost all trading platforms offer the Forex beginner the use of a demo account. Like with any new skill, currency exchange takes time and a certain level of expertise before you get good at it and in order to become a successful trader the Forex beginner must develop their own trading strategy as no one strategy will work for all traders. With a demo account there is no real money involved so this gives the Forex beginner the ability to get a more solid foundation of the trading platform and to try out different strategies and ideas without the monetary losses.
Use the demo account for a few weeks and when you feel comfortable with how trading works move your trades onto a live account but remember, If the Forex beginner feels like they are not ready to move to live trades there really is no hurry. It is far better to keep trading on a demo account until they have a solid understanding of the Forex platform so that they can minimise the risk of making mistakes
4. Leave Your Emotions At Home
Anyone who trades in Forex will know that there is a great deal of emotion involved. The Forex beginner should not chase their losses after losing a trade and should also at the same time not be greedy when winning. Overreaction blocks clear thinking of the Forex beginner and overtrading can shake their money management and increase trading risks. Forex is a part of pure gambling like in a casino, any attempt to trade without analysis or studying the market is equal to a game. Games are fun except when you lose real money.
5. Never Risk More Than 2-3% Of Your Total Trading Account
The difference between a successful Forex beginner and an unsuccessful one is that the first will be able to survive under unfavorable market conditions, while the other will lose his account total after 10-15 unprofitable trades in a row. Even with the same trading system 2 traders can get opposite results in the long term. The difference will be in the money management approach. A quick fact to get your mind thinking about money management: losing just 50% of you account balance requires making 100% return only to restore the original balance.