Forex Trading for Beginners

Why Forex Trading?

Over ten years ago, Forex trading was one of the few options that individuals could use to trade on the financial markets. Forex has become more accessible than ever with its market size of almost $5 trillion.

Here are some of the reasons behind the rapid growth of Forex’s market size.

• Low entry cost makes it simple to get started.
• Leverage
• Opportunities to trade on a regular basis
• Low bid-ask price: high liquidity
• Short selling is simple.

If you know good risk management, like technical and/or fundamental analysis of markets, You want to profit from a growing market with plenty of liquidity, volatility, and leverage, Forex trading is for you.

• How does it work?

Trading in foreign exchange or Forex is the process of exchanging one currency for another. 

For example, if you are planning to travel to China, you will need to exchange your money for Chinese yuan. In the world of business, Forex helps to reduce fee on transactions. 

Consider an example, if a business is selling a product in one country and its components are being purchased from another country, then the business that is selling a product will exchange its home currency for the country of manufacture. In this way, the transaction cost is reduced.

To get started, 

• Learn about Forex

Even if you have experience with equity markets, knowing specific and specialized information about forex trading is going to be a mandatory step. 

Here are a few online resources, 

• Forex Trading For Beginners – Free course on Udemy.

• IQ Option.
• Top Free Online Courses on Forex – Udemy.
• Setting up a brokerage account

Creating a micro Forex trading account with the lowest capital requirements is a smart option for new traders. 

Brokers can restrict their transactions to 1,000 units of a currency using these accounts, which have flexible trading constraints. 

To brief you up, a basic account fortune is 100,000 currency units. A micro forex account will help you in gaining experience with forex trading.

• Keep a check

Keep a check on your numbers every single day. Ensure that you don’t have any pending positions left and you are saving enough for some future trades as well.

• Maintain a trading strategy

Trading is not always about your gut feeling. It’s difficult to come to a decision quickly when you have a number of factors involved. 

Having a good trading strategy will always help you in developing comprehensive trading principles and a roadmap. 

It evaluates how much money you’re set to put up for trading and, as a result, how much risk you can accept without losing your investment in forex. 

Note that forex trading is often a high-leverage situation. If you are prepared to take the risk will be rewarded more.

To prepare a good trading system, refer to the articles below,

• Design your Forex trading system.

• Developing a Trading Plan.

• How to build a Forex Trading Strategy.

Conclusion:

It’s necessary not to get carried away by your trading positions but to try maintaining emotional balance in both winnings and losses. 

When it is time to shut your positions, be rigid with yourself and keep up the learning curve!