Forex trading. Where to start?
Forex in this respect is as attractive as possible - the turnover of this international market is growing year by year, reaching enormous amounts.
The desire to try oneself in a new business is characteristic of almost every person. Forex in this respect is as attractive as possible - the turnover of this international market is growing year by year, reaching enormous amounts. And that is why the number of people wishing to try themselves in foreign exchange trading is constantly growing.
What is Forex?
Forex is a market whose main commodity is currency. To make a profit, they try to acquire it as cheaply as possible and sell it as expensively as possible. There is no luck in this, like in a game of chance. This is a business, and it has its pros and cons.
The currency market can be compared to the market in which stocks are traded. After all, if you think about it, a currency is also nothing more than stocks of one or another state. The main advantage of Forex, as a platform for trade in it, is that this market works around the clock and allows you to trade from almost anywhere in the world with Internet access. In addition, currencies, in essence, have high liquidity, that is, the buyer is almost always on them.
How to take the first steps?
From a technical point of view, to access Forex, a trader needs to find a broker, install a trading platform on his computer (or other device that provides Internet access) and deposit funds into his own trading account with a broker. After that, you can start trading. But in reality, everything is not so simple.
One of the most important steps is choosing a broker. Access to Forex is not possible for a private person without the intermediary of a broker. And it is the quality of the services provided by the broker that largely determines the future success of the trader. Brokerage company must be:
• create comfortable and favorable trading conditions for the trader.
In addition, the trader, naturally, will need to understand how the trading terminal works and how to conclude deals with it. But this is not the most difficult. It is much more important to learn the basics of currency trading and to get enough knowledge to be able to correctly predict the fluctuations in exchange rates. For this, any sources of knowledge can be used, of which there are many today, from articles on specialized resources to video courses. Often, brokers themselves conduct basic training for beginners.
How does Forex trader work?
In order to make money on Forex, a trader must, having analyzed the facts, determine the fluctuations in exchange rates. In a general sense, he:
• determines changes in the price of a currency;
• Based on this, it is determined with the currency for purchase or sale;
• concludes necessary transactions.
To conclude transactions for amounts larger than those on the trader’s trading account, the broker provides leverage to his clients. Thanks to his presence, the trader has the opportunity to make the game on the amounts that exceed his initial investment by several times. But this is possible until the deposit limit on the trading account is reached. If trader goes minus the amount that was initially deposited, his work account goes into "inactive" mode.
To prevent this from happening, you need a quality forecast for the movement of the courses. To build it use:
• technical analysis - studying changes in exchange rates for certain time periods, made using graphs;
• fundamental analysis - the study of the economies of those countries whose currencies are used in trade, world news and various political events.
Forex trader strategy can be:
Short-term - transactions are focused on fluctuations in the course of the day;
Medium-term - based on fluctuations lasting up to several months;
Long-term - longer.
Short-term strategies are the most accessible for beginners, since they do not require the construction of accurate and "long-range" forecasts, and also allow you to do without large investments.
It is good to remember
A few tips for beginners:
• Learning is indispensable.
• It is better to make the first transactions on a demo account, that is, where money is virtual and exchange rates are real. Firstly, without this, the development of a trading platform is impossible. Secondly, it allows you to "get your hand" and learn to control yourself without unnecessary costs.
• During transactions, you need to maintain self-control. Those who turn Forex trading into roulette do not stay long in the ranks of traders.
• Losses during one transaction should not exceed 4% of the funds in the trading account of the trader.
• Installation of stop loss is necessary, losses must be kept under control.
• Success indicator - not the income from one transaction, but the number of successful transactions.
• Thoughtful tactics is the basis of success. The ability to understand the intricacies comes with experience.