The Forex market is one of the largest trading ventures around. Its daily global turnover notches up to $5.1 trillion, which is staggering to say the least! Profits galore and for that reason, many start trading currencies hoping to get their fair share from this global treasure chest. However, trading currencies is by no means an easy task. There are many aspects which one needs to keep in kind. Here are some noteworthy tips which could prove beneficial for a promising newbie wanting to become an online Forex trader.
Tip 1: Learn About Forex And Its Variables Properly:
It sounds simple enough but it is where most don’t pay much attention to. Proper education before getting into any venture is a must and safe to say, it is paramount for trading currencies too. A newbie wanting to become an online Forex trader has to know about –
Forex Majors – USD, GBP, EUR, JPY, AUD etc. along with the factors which determine their fluctuations.
Terminologies such as Pip, leverage, base currency and quote (secondary) currency, cross rate, exchange rate, Bid/Ask price, etc.
Nicknames of Forex currencies, for example – USD/JPY refers to as Dollar Yen, NZD/USD as Kiwi and GBP/USD as Sterling/cable.
Modes of market analysis which includes fundamental and technical market analysis methods.
The top trading indicators which users can work with.
These are a few of the primary aspects which a newbie has to consider before stepping foot into the market. The best way to learn is to download FX PDFs or informative blogs/articles from notable sources.
Tip 2: Finding a Reliable Broker with MT4/MT5 Demo Account:
After gathering ample knowledge about Forex, one has to implement what one has learned. The best way to do that would be to find a reliable broker (preferably one who offers MT4/MT5 account for newbies). After finding out, one should cater to demo trading which top online Forex traders believe is the best way to learn about the market in practicality.
With a demo account, one can implement various trading indicators such as MACD, or Bollinger Band or cater to Price Action trading. With this, one would be able to decipher the trading mode which is suitable to one’s needs.
Along with this, the best online Forex traders also suggest newbies to select the leverage properly. The rule of thumb is not to opt for 10:1 or 20:1 leverage – even if they are demo trading.
There are 2 reasons for that:
First, it helps formulate a good trading habit which will eventually continue when hitting the market with real money.
The second being it minimizes losses if the market behaves opposite to the expectation.
Leverages are always dicey as chances of winning 20% of the investment are directly proportional to losing money in the same proportion.
Tip 3: Stick to One Currency in the Initial Stages:
Another good beginner tip is to stick to one currency pair when learning to trade Forex. The market is quite chaotic in nature and hence, it can get a tad difficult to tackle 2-3 currency pairs at first. As a tip, it would be great to start off trading with one’s own national currency. Or if not, then going for the one which offers more liquidity would serve as a good choice for practicing.
These are the tips which a newbie wanting to become a proficient online Forex trader should abide by at first. So, stick to these thumb rules to keep learning Forex trading. With time, one will get better and be better in procuring profits from this massive venture.
So…, Learn. Invest. Prosper!
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.