The key to becoming a successful Forex trader is understanding the fundamentals and underlying concepts of the entire process. Trading has become extremely accessible with the introduction of complete online trading systems and brokers. It can be intimidating for beginners to learn all the terminology, strategies and then decide on which broker to trade through. Hopefully this article will be able to guide you in the right direction to get you started.
Learn Forex Trading Basics
If you are new to trading, you should definitely take the time to learn everything you can before you start investing your money into anything. There are many websites that offer free information and training such as BabyPips.com. Many of the bigger trading websites also have video and written tutorials to help beginners start trading.
It is vital that you actually take the time to read and learn about the fundamentals of trading Forex before you begin mindlessly start buying and selling hoping to get lucky. Relying on blind luck and not taking the time to understand the fundamentals is the easiest way to blow your entire trading account.
Open a Practice Account
Most of the popular Forex trading websites offer a free practice account where you can familiarize yourself with the program and get some hands-on trading experience. The practice accounts act almost like real accounts with regularly updated price charts and virtual money to simulate read trading conditions. A common piece of advice that is given to beginners is to spend a few months to a year trading on a practice account before using real money. This will teach you all the basics and show you which strategies will give you the highest chance of continual profitable trading.
Figure Out Your Budget
A common piece of terminology you’ll hear in Forex trading is “capital”. The capital refers to how much money you have in your account for trading. Capital is important because the more capital you have the less risk you have to take for bigger returns.
Most websites allow you to open an account with as little as $250 or even $1, but to make a significant amount of money you’ll need to invest thousands.
Decide On a Broker
You’ll be making most of your trades through a broker and deciding on which broker to trust is one of the most important decisions when starting to trade. Research everything you can about each and every broker you are considering. Make sure they trade with your currency and offer withdrawal methods that are suitable for you.
Other features that would influence your decision are transaction fees, trading software preferences and customer service.
Open a Real Account
Once you have decided on a broker, learn the basics of trading and familiarized yourself with trading fundamentals, it’s time to open up a real account and start trading for real. Continue to learn more about Forex trading and keep up to date with the latest news and strategies to ensure you don’t fall behind.