Forex is also known as foreign exchange or FX is a global over the counter market for the trading of currencies. If you are thinking about trading, first you have to know it is not a ‘get rich quick’ scheme and can take some time to learn the terms and the way things work. If you are serious about getting started in forex then take a look at our steps below.
Consider Opening A Demo Trading Account First
Before you dive straight into the forex world it’s a good idea to consider opening a demo account first. This will allow you to get used to the way forex operates and prepare you for when you decide to invest some real money. A forex demo account allows you to ‘trade’ using real-time stats, gaining the experience before will help you to become more confident for when you open a real account.
Think About Hiring a Broker
It’s always good to get advice from a professional before making any big financial decisions. There are some knowledgeable forex brokers out there for you to choose from. Brokers will compare the different trading platforms from mobile to web-based. Check that the broker covers all the right trading instruments such as crypto, stocks, and securities. Look at reviews and websites like Topbrokers.com to help you choose a reliable and trustworthy broker. It’s also a good idea to enquire about their minimum deposit and if they can offer you a demo account.
Have A Diary At Hand
Having either an electronic or paper diary will help you immensely in your forex journey. This will help you keep track of any events or announcements that happen weekly, monthly, or annually. You will need to make note of when data is being released, if you do your research you will be able to find the pre-published dates. Keeping a note of the important things will help you keep track of everything and grow your portfolio.
Get Familiar With The Forex Language
When learning something new you will always find that there is a lot of jargon or specific language you have to get used to. Learning the forex language will help you be able to read the market correctly and hold important discussions with experienced traders. Start by reading articles on forex and after a while, you will start to pick up the phrases and words used regularly. A few keywords you might come across are trading margin, currency pairs, a spread, and exotic currency pairs.
Setting Up A Forex Trading Account
Once you have learned the lingo and got used to using the demo account it is time to set up your forex account. Setting up a forex trading account will allow you to access the market and make real-time trades. If you are hiring a broker they will help set this up for you and get you started on making the right trades and deals.
Learn How The Forex Calculator Works
Forex is very mathematical but don’t let that scare you off if you are not good at maths, there is a calculator that can help you. Unlike a standard calculator, the forex calculator allows traders to calculate risks, profits, and losses. There are many to chose from on the internet so find one that you understand how to use.
Decide On What Type Of Account You Want
There are two types of accounts that you can have, these are personal or managed accounts. A personal account is where you manage all the trading yourself, whereas a managed account is where you put trust in an account manager/broker to make the deals and trades on your behalf. If you are just starting out, then a broker would be beneficial, stick with brokers who are offering realistic returns.
How Much Should You Invest?
When getting started in forex it can be hard to know how much is a good amount to start with. We think starting with £100 / $100 / €100 etc is a good starting point. You can open some accounts with as little as £5 /$5 / €5 etc but you wouldn’t see much financial growth from such a small amount. You can start with any amount you wish however we think just sticking to the £100 / $100 / €100 etc is a great amount as your risk is pretty low. If trading is done correctly and smartly you could be looking at a profit of a couple of thousand.
- Open up a demo account until you are making a ‘profit’ and ready to move on to the real thing.
- Find a decent reliable broker that will help you make money.
- It is not a get rich quick fix.
- Trade with your head, don’t get too emotional or attached to certain trades. Disattaching your emotions can help you make clearer and better decisions.