Looking for ways to earn money and want to be your own boss? Forex trading might be a good choice for you! This hobby (or even full-time job if you wish) might bring you some serious cash if you play your cards right. In case you‘re not familiar with what forex is, it includes trading foreign exchange on the market. Why is forex trading so popular? It can be a great source of income, without putting much effort into it. Of course, you’ll need to learn some essentials of trading first and adopt basic forex strategies if you want to make a real progress. Later, as you earn more experience, trading will become a piece of cake.
Here are several things to have in mind if you want to become a successful forex trader.
- The first step – learn forex terminology
Words such as ask price, bid price, leverage, spread, quote currency, base currency and others are a must-have in your vocabulary if you’re serious about forex trading. There are numerous online resources that can help you get started and learn the basic terminology of forex and adopt the language of the trade. It’s needless to say that without this knowledge, successful trade would have been impossible. So, go on, take your tablets into hands and start learning from the scratch.
- Looking for trustworthy trading tips
Instead being impatient and diving head first, make sure that you do some more reading – preparation and gathering valuable resources will literally pay off in this case. Now that you have acquired knowledge about basic forex terminology, you can continue to learning about basic principles of trade. This includes reading articles about available online trading methods and learning forex rules, watching educational videos, finding blogs of renowned experts who often share their trading tips and tricks with their readers.
- Deciding on currency
The first important decision to make is which currencies you’ll buy and sell. This depends on several factors: economy, trading position, unemployment rate or political situation in the country. When analyzing these factors, you can rely on experts’ opinion. If they predict that the economy in a certain country will weaken, it would be best to sell their currency and purchase the one from the country with a better economic situation at the moment. The currency pairs with the greatest liquidity are US dollar/Yen, British Pound/US dollar, Euro/US dollar and Swiss Franc/US dollar.
- Finding your own strategy
When you decide on currency, before investing any actual money, it would be best to plan your strategy in advance. Since you’re a beginner, it might be hard to decide on this right away. However, you might start trading by using strategies that are simple and reliable. Here’s the tricky part: not all strategies suit all currencies and trader profile – there’s no strategy that works best in all possible cases. Most new traders went through the process of “trial and error” but this is the best way to learn which strategy suits you.
- Choose a broker and open an account
The forex market is a rich one. This might be a bit frightening for a beginner trader as you simply can’t decide on which forex broker to choose. Here are several tips that might be helpful. Brokers earn their profits through spreads and commissions – lower the spreads, the better for you. Make sure that your broker is registered (all relevant information about registration and regulations should be visible on their website). Most brokers will provide at least two types of accounts to choose from. Give an advantage to brokers who offer varying deposit requirements.
- Try different platforms
Forex brokers will offer you different trading platforms. These platforms have features which aim is to help you to raise your trading activities at the highest level possible. The list of features includes real-time charts, tools for technical analysis, various forex-related news and data of importance for traders. Before you choose a broker, it would be best to check their choice of platforms. Don’t commit and pay for their service before trialing available solutions – they should suit you and the strategy you chose. Make sure that the platform is intuitive for new users, and that is enables easy entry and exit.