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Beginners Guide to Forex Trading: How to Start Trading on Forex Market
Forex is an international exchange market, which participants are investment funds, banks, broker companies. Every day transactions amounting to trillions of dollars are made on the platform. This is precisely why many investors sooner or later start to size up the opportunities of Forex.
What are financial markets - exchange and Forex?
Most beginners don’t see much difference among financial markets, exchanges, currency, Forex, stocks, and other terms. First of all, it’s necessary to understand that the financial market is a system of economic relations, and not a platform for trading currency.
Financial markets may be divided into the next types:
•Forex or currency market. Key product – currencies. Major companies, banks, and investment funds are trading here.
•Stock market. Key product – securities: stocks, bonds, bank papers, etc.
•Precious metals market. Its product is gold, silver, platina, etc.
•Product market. Key products – oil, agricultural and natural resources, metals, etc.
Financial markets differ not only by the product type but also by trade methods. Two groups can be distinguished:
•Exchange sites. Each exchange specializes in a certain product: metal, agricultural products, natural resources, etc. Sale and purchase transactions are made in the presence of an official representative with the signing of documents. You can trade on exchanges in strictly specified periods.
•Off-exchange sites. This group Forex belongs to, as well as other trading platforms without a specific spot for closing deals. You can trade on these platforms at any time of day from around the world.
Today Forex is the most available platform. Anyone can try his hand at currency trading.
Where to start currency trading in Forex for a beginner?
What are financial markets - exchange and Forex?
Most beginners don’t see much difference among financial markets, exchanges, currency, Forex, stocks, and other terms. First of all, it’s necessary to understand that the financial market is a system of economic relations, and not a platform for trading currency.
Financial markets may be divided into the next types:
•Forex or currency market. Key product – currencies. Major companies, banks, and investment funds are trading here.
•Stock market. Key product – securities: stocks, bonds, bank papers, etc.
•Precious metals market. Its product is gold, silver, platina, etc.
•Product market. Key products – oil, agricultural and natural resources, metals, etc.
Financial markets differ not only by the product type but also by trade methods. Two groups can be distinguished:
•Exchange sites. Each exchange specializes in a certain product: metal, agricultural products, natural resources, etc. Sale and purchase transactions are made in the presence of an official representative with the signing of documents. You can trade on exchanges in strictly specified periods.
•Off-exchange sites. This group Forex belongs to, as well as other trading platforms without a specific spot for closing deals. You can trade on these platforms at any time of day from around the world.
Today Forex is the most available platform. Anyone can try his hand at currency trading.
Where to start currency trading in Forex for a beginner?
Successful Forex trading goes hand in hand with a clear strategy. If you are just getting started in this area, it’s worth sticking to the next algorithm:
•Broker selection. It’s worth using specialized resources to look for an intermediary: learn ratings, feedback, the company’s trading history, etc. Every small thing is important here.
•Registration on the intermediary’s site. Registration for creating a personal account takes a few minutes. Sometimes a player should confirm the identity or verify the bank card.
•Depositing funds to a trading account. The deposit size depends on a specific intermediary. You can also use a demo account, which some companies provide. This account teaches you currency trading in real conditions but with virtual cash.
•Installation of trading software. Software for Forex is very diverse. Sometimes beginners fall back upon the help of special advisor software allowing them to automate the process fully or partially.
Moreover, a beginner in currency trading should get to know the key concepts and definitions of Forex. It’s better to have a seasoned mentor next to you.
How to choose a reliable broker?
The big question for a beginner is the selection of a reliable broker. When choosing, turn attention to a certificate. This is a mandatory condition for trading. You can learn more about the license on the company’s official site.
In addition, the next criteria should be considered:
•Company’s age. That’s one of the key indicators of reliability. By choosing a broker company with limited experience, you are risking losing your money. It’s best if the company’s age is at least 5 years. Remember this rule!
•Reputation. Read the feedback of real clients, make sure that the company had no five-star scandals, problems with money withdrawal, etc. You can find the required information on the Internet.
•Depositing/withdrawal conditions. This information is on the company’s site. Consider which bank and payment systems the broker works with, how convenient it will be to deposit and withdraw your income.
•Financial instruments. Think which financial instruments you'll work with, and whether the selected broker has the desired options. The more instruments are offered, the better.
•Support availability. A good intermediary should provide high-quality feedback to its clients. Support may be both informational and technical.
Broker selection is the most important and responsible stage. This should be a reliable partner perfect for long-term relations.
Trading platform selection
After selecting a Forex broker, you need to decide on a trading platform. Today there is a lot of platforms meeting the requirements and preferences of any trader. These could be online resources, various apps for PC and other devices.
When it comes to currency trading in Forex, special trading platforms are used. That’s software, which allows you to maintain communication with the broker, give directions for the purchase and sale of currency pairs. You can install it on one or several devices. MetaTrader 4 and MetaTrader 5 are among popular apps.
It is important to realize that any software needs testing. This way only you can select the best option for you.
Market analysis
It won’t do to trade in Forex driven by the only intuition without a strategy. In this case, the risk if losing funds is high. Market analysis is specially created to reduce the risks. The following analysis areas can be named:
•Technical. These are various diagrams, charts allowing deciding on current deals. Using them, you can assess and study the price history, find regularities, study potential risks.
•Fundamental. The basis of this area is studying public information, for example, publications of expert mass media, etc.
The full and high-quality analysis allows you to significantly reduce risks and get the top profit avoiding breaking even or loss.
Strategy selection
It’s of paramount importance to figure out the strategy. Your success and future earnings depend on it.
Strategies can be divided into:
•Aggressive. They differ with quite high risks, but a good income too if successful. As a rule, experienced players ready to sustain a loss, if they fail, use these strategies. This approach is not recommended for beginners.
•Conservative strategies. They consider all possible risks and their reduction to a minimum level. Conservative trading fits not only beginners but professionals too.
Regardless of experience and skills, it may be hard to choose the right strategy on the first try. To reduce risks, you can try different strategies on special demo accounts. That’s an optimal decision for a beginner.
Step-by-step guide for beginners
•Broker selection. It’s worth using specialized resources to look for an intermediary: learn ratings, feedback, the company’s trading history, etc. Every small thing is important here.
•Registration on the intermediary’s site. Registration for creating a personal account takes a few minutes. Sometimes a player should confirm the identity or verify the bank card.
•Depositing funds to a trading account. The deposit size depends on a specific intermediary. You can also use a demo account, which some companies provide. This account teaches you currency trading in real conditions but with virtual cash.
•Installation of trading software. Software for Forex is very diverse. Sometimes beginners fall back upon the help of special advisor software allowing them to automate the process fully or partially.
Moreover, a beginner in currency trading should get to know the key concepts and definitions of Forex. It’s better to have a seasoned mentor next to you.
How to choose a reliable broker?
The big question for a beginner is the selection of a reliable broker. When choosing, turn attention to a certificate. This is a mandatory condition for trading. You can learn more about the license on the company’s official site.
In addition, the next criteria should be considered:
•Company’s age. That’s one of the key indicators of reliability. By choosing a broker company with limited experience, you are risking losing your money. It’s best if the company’s age is at least 5 years. Remember this rule!
•Reputation. Read the feedback of real clients, make sure that the company had no five-star scandals, problems with money withdrawal, etc. You can find the required information on the Internet.
•Depositing/withdrawal conditions. This information is on the company’s site. Consider which bank and payment systems the broker works with, how convenient it will be to deposit and withdraw your income.
•Financial instruments. Think which financial instruments you'll work with, and whether the selected broker has the desired options. The more instruments are offered, the better.
•Support availability. A good intermediary should provide high-quality feedback to its clients. Support may be both informational and technical.
Broker selection is the most important and responsible stage. This should be a reliable partner perfect for long-term relations.
Trading platform selection
After selecting a Forex broker, you need to decide on a trading platform. Today there is a lot of platforms meeting the requirements and preferences of any trader. These could be online resources, various apps for PC and other devices.
When it comes to currency trading in Forex, special trading platforms are used. That’s software, which allows you to maintain communication with the broker, give directions for the purchase and sale of currency pairs. You can install it on one or several devices. MetaTrader 4 and MetaTrader 5 are among popular apps.
It is important to realize that any software needs testing. This way only you can select the best option for you.
Market analysis
It won’t do to trade in Forex driven by the only intuition without a strategy. In this case, the risk if losing funds is high. Market analysis is specially created to reduce the risks. The following analysis areas can be named:
•Technical. These are various diagrams, charts allowing deciding on current deals. Using them, you can assess and study the price history, find regularities, study potential risks.
•Fundamental. The basis of this area is studying public information, for example, publications of expert mass media, etc.
The full and high-quality analysis allows you to significantly reduce risks and get the top profit avoiding breaking even or loss.
Strategy selection
It’s of paramount importance to figure out the strategy. Your success and future earnings depend on it.
Strategies can be divided into:
•Aggressive. They differ with quite high risks, but a good income too if successful. As a rule, experienced players ready to sustain a loss, if they fail, use these strategies. This approach is not recommended for beginners.
•Conservative strategies. They consider all possible risks and their reduction to a minimum level. Conservative trading fits not only beginners but professionals too.
Regardless of experience and skills, it may be hard to choose the right strategy on the first try. To reduce risks, you can try different strategies on special demo accounts. That’s an optimal decision for a beginner.
Step-by-step guide for beginners
So, beginners who break the ground in Forex should stick to a simple algorithm:
•Find a good broker. Your success and the safety of your funds depend on it.
•Register on the site. You can do it on your own taking all steps and verification.
•Open an account and pay a deposit. The deposit size depends on a specific broker. It’s usually recommended to deposit no less than $100-300.
•Install software. It allows you to make operations and contact a broker at any time convenient for you.
•Choose a targeted asset and analyze it. The ability to analyze is a must-have for a successful trader.
•Choose a strategy. Study all options. Try to stick to the chosen plan.
•Open a deal. Keep a sharp lookout for changes.
•Close a deal profitably and withdraw money to your account.
If you are afraid of losing your money, you can start trading using demo accounts. This will help you come up with a further action plan, as well as allow you to gain insight into the basic details of the currency market. Forex trading is a job calling for a responsible approach.
•Find a good broker. Your success and the safety of your funds depend on it.
•Register on the site. You can do it on your own taking all steps and verification.
•Open an account and pay a deposit. The deposit size depends on a specific broker. It’s usually recommended to deposit no less than $100-300.
•Install software. It allows you to make operations and contact a broker at any time convenient for you.
•Choose a targeted asset and analyze it. The ability to analyze is a must-have for a successful trader.
•Choose a strategy. Study all options. Try to stick to the chosen plan.
•Open a deal. Keep a sharp lookout for changes.
•Close a deal profitably and withdraw money to your account.
If you are afraid of losing your money, you can start trading using demo accounts. This will help you come up with a further action plan, as well as allow you to gain insight into the basic details of the currency market. Forex trading is a job calling for a responsible approach.
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