How To Get Started As A Forex Trader
Forex trading, short for foreign exchange trading, is where currencies are converted from one currency to another. It can be likened to a currency exchange that you do when you travel, but in the case of forex traders, exchange occurs in popular currency pairs, such as EUR/USD and GBP/JPY, and investors earn profits as base currencies appreciate.
The forex market is available 24 hours a day, five days a week, and over 40% of global trading in forex comes from the UK, according to the Bank of England. With such a large market, it comes as no surprise that many choose to get into forex trading.
What do you need to start forex trading?
Before you can start, you will need a forex trading account under a brokerage. Do your research to ensure your forex broker is secure and under well-regulated jurisdiction such as the UK’s Financial Conduct Authority (FCA). Once you’ve chosen your broker, it’s easy to establish a trading account online. For example, opening an account on the trading platform FXCM is simple. After selecting your country of residence and desired trading software, you’ll be redirected to a secure server to complete an online application. Afterward, you will be provided a username and password for your account, where you can log in and deposit funds to start trading. To ensure additional security, make sure you use a strong password to safeguard your money. Once set up, you’ll be able to move your assets and begin trading through these platforms.
How can you grow your money in forex trading?
Before you can start earning money, you need to practice and find the right trading strategy. There are several ways you can learn – websites, books, and even actual experience without sustaining heavy losses. Here are some ways that can help you get a better grasp of forex trading to get you started.
Start with Demo Trades
There are several broker platforms that allow you to simulate the forex market without using actual money. The experience will teach you risk management and give you room to experiment with different currency pairs and strategies. Trading in a controlled environment is important because, as former deputy editor of Financial Investment News Nick Lioudis warns, there are plenty of events, like war, that affect forex outcomes, so it’s vital to be cautious and vigilant.
Do small trades with micro accounts
Micro accounts primarily cater to starting investors that don’t want to risk a lot of money in trades. These provide capital requirements as low as 1,000 units of a currency, giving allowance to learn more about the intricacies before moving on to trading much larger lots, which are at least 100,000 currency units.
Know how much you’re willing to lose
There is no denying that forex trading involves risks, so always assess how much you’re willing to lose. In forex trading, you can borrow money via leverages – this allows you to make bigger investments for currency pair changes. However, any losses may lead you to lose all of your initial deposit or margin. Make sure to only leverage what you can afford.
As a beginner, forex trading can be complicated. But with the right mindset, you can learn more about the market, devise and stick to a trading strategy, and eventually find winning trades.
Whether you are forex trading or investing in another venture, becoming wealthy is all about having the right mindset. Our previous post on the “6 Simple Lifestyle Habits Millionaires Are Practicing” found that 79% of people get rich because of optimism, gratefulness, and self-motivation. These values are key in developing the drive and patience to learn more about the hurdles you have to overcome to grow your wealth. If you are looking to become wealthy we hope this article on forex trading proves useful.