How to Start Forex Trading

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Table of contents

  1. Empty
  2. How to Start Forex Trading in 7 Steps
  3. Step 1: Gain Knowledge About Forex Trading
  4. Step 2: Create a Brokerage Account
  5. Step 3: Determine Your Trading Strategy
  6. Step 4: Check Your Position Constantly
  7. Step 5: Understand Currency Pairs
  8. Step 6: Understand the Positions of Forex Trading
  9. Step 7: Don’t Beat Yourself Up

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{"blocks":[{"key":"76amn","text":"Trading in the currency exchange market is a sure way to earn money, but only if you do it right. In 2019, Forex’s daily trading volume went up to $6.6 trillion, which gives you an idea of how massive the trading market actually is.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":232,"style":"color-rgb(0,0,0)"},{"offset":0,"length":232,"style":"bgcolor-transparent"},{"offset":0,"length":232,"style":"fontsize-11pt"},{"offset":0,"length":232,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}},{"key":"9c41u","text":"If you want to be a part of that, you need to first learn about the foreign exchange market. You hear the word Forex everywhere, but you probably don’t know where to get started. Here's a beginner’s guide to put you on the start line.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":234,"style":"color-rgb(0,0,0)"},{"offset":0,"length":234,"style":"bgcolor-transparent"},{"offset":0,"length":234,"style":"fontsize-11pt"},{"offset":0,"length":234,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}}],"entityMap":{}}

How to Start Forex Trading in 7 Steps

{"blocks":[{"key":"cqfvo","text":"Trading in anything needs some skills, experience, and patience. How about trading in money?","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":92,"style":"color-rgb(0,0,0)"},{"offset":0,"length":92,"style":"bgcolor-transparent"},{"offset":0,"length":92,"style":"fontsize-11pt"},{"offset":0,"length":92,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}},{"key":"5taub","text":"The currency exchange market is a bit complicated, so you need a great deal of knowledge before starting. These steps will help you get started on the right track, and the rest will follow.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":189,"style":"color-rgb(0,0,0)"},{"offset":0,"length":189,"style":"bgcolor-transparent"},{"offset":0,"length":189,"style":"fontsize-11pt"},{"offset":0,"length":189,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}}],"entityMap":{}}

Step 1: Gain Knowledge About Forex Trading

{"blocks":[{"key":"4tta6","text":"You don’t want to jump into the foreign exchange market blinded by the light. The numbers are tempting, so you want to join in and make some money. However, you can’t do so unless you have enough knowledge about Forex.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":218,"style":"color-rgb(0,0,0)"},{"offset":0,"length":218,"style":"bgcolor-transparent"},{"offset":0,"length":218,"style":"fontsize-11pt"},{"offset":0,"length":218,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}},{"key":"c5968","text":"In the end, it’s a project of its own, and it’s different from equity trading. Even the drivers for the currency movement are different.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":136,"style":"color-rgb(0,0,0)"},{"offset":0,"length":136,"style":"bgcolor-transparent"},{"offset":0,"length":136,"style":"fontsize-11pt"},{"offset":0,"length":136,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}},{"key":"coq1s","text":"To learn about Forex, you may look for online beginners’ courses. Then, you can move to more advanced classes when you’re done with the beginner’s phase.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":153,"style":"color-rgb(0,0,0)"},{"offset":0,"length":153,"style":"bgcolor-transparent"},{"offset":0,"length":153,"style":"fontsize-11pt"},{"offset":0,"length":153,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}}],"entityMap":{}}

Step 2: Create a Brokerage Account

{"blocks":[{"key":"2td9u","text":"To start Forex trading, you’ll need to create a brokerage account to allow you to sell and purchase currencies. It’s worth noting, though, that Forex brokers don’t gain money through commissions. Instead, they earn their profit from pips, which are the differences between purchasing and selling prices.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":303,"style":"color-rgb(0,0,0)"},{"offset":0,"length":303,"style":"bgcolor-transparent"},{"offset":0,"length":303,"style":"fontsize-11pt"},{"offset":0,"length":303,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}},{"key":"drsba","text":"When you’re a beginner, your best bet is to create a micro trading account because it has average capital requirements. It’ll allow you to keep your trades limited, so you can trade with 1,000 units, for example. Regular accounts need around 100,000 units to start trading, so a micro account is the best alternative for beginners—at least until you find the best trading style for you.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":386,"style":"color-rgb(0,0,0)"},{"offset":0,"length":386,"style":"bgcolor-transparent"},{"offset":0,"length":386,"style":"fontsize-11pt"},{"offset":0,"length":386,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}}],"entityMap":{}}

Step 3: Determine Your Trading Strategy

{"blocks":[{"key":"7223q","text":"The currency trading market is always on the move. At any moment, you’re prone to losing money or earning more of it. For this, you need to have a clear trading strategy so that you know the risk of the amount you’re trading with.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":230,"style":"color-rgb(0,0,0)"},{"offset":0,"length":230,"style":"bgcolor-transparent"},{"offset":0,"length":230,"style":"fontsize-11pt"},{"offset":0,"length":230,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}},{"key":"a4ll8","text":"The strategy will also give you guidelines to what you should do; it’ll lay the road map for you.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":97,"style":"color-rgb(0,0,0)"},{"offset":0,"length":97,"style":"bgcolor-transparent"},{"offset":0,"length":97,"style":"fontsize-11pt"},{"offset":0,"length":97,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}},{"key":"7ltg8","text":"Try to build the strategy according to your finances and current situation while considering the amount you’re willing to trade with. Consequently, you'll need to calculate the risk involved so even when you lose money, you don’t get burned out.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":245,"style":"color-rgb(0,0,0)"},{"offset":0,"length":245,"style":"bgcolor-transparent"},{"offset":0,"length":245,"style":"fontsize-11pt"},{"offset":0,"length":245,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}}],"entityMap":{}}

Step 4: Check Your Position Constantly

{"blocks":[{"key":"2aeff","text":"When you start trading, it’s a good practice to check your position every day. If you have solid trading software, it’ll provide daily results of your trades, anyway, so it’d be good to check them constantly. ","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":209,"style":"color-rgb(0,0,0)"},{"offset":0,"length":209,"style":"bgcolor-transparent"},{"offset":0,"length":209,"style":"fontsize-11pt"},{"offset":0,"length":209,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}},{"key":"5jqtp","text":"While you’re checking your position, make sure there aren’t any pending positions waiting to be filled out. And, take a look at the amount of cash in your account so you ensure you have enough for future trades.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":211,"style":"color-rgb(0,0,0)"},{"offset":0,"length":211,"style":"bgcolor-transparent"},{"offset":0,"length":211,"style":"fontsize-11pt"},{"offset":0,"length":211,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}}],"entityMap":{}}

Step 5: Understand Currency Pairs

{"blocks":[{"key":"9oil1","text":"Trading on the Forex market involves selling and buying two currencies: the quote and base currencies. Those are called the currency pair because you sell one to buy the other. To determine the price of a currency pair, calculate how much quote currency it costs to buy one base currency unit.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":293,"style":"color-rgb(0,0,0)"},{"offset":0,"length":293,"style":"bgcolor-transparent"},{"offset":0,"length":293,"style":"fontsize-11pt"},{"offset":0,"length":293,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}},{"key":"66ii8","text":"Here, the profit comes from estimating the price move of this pair you’re trading with. ","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":88,"style":"color-rgb(0,0,0)"},{"offset":0,"length":88,"style":"bgcolor-transparent"},{"offset":0,"length":88,"style":"fontsize-11pt"},{"offset":0,"length":88,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}},{"key":"eo59u","text":"Forex provides you with endless combinations of pairs that allow you to make a profit. There are popular pairs, such as the US Dollar against the Euro and the Japanese Yen against the US Dollar. ","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":195,"style":"color-rgb(0,0,0)"},{"offset":0,"length":195,"style":"bgcolor-transparent"},{"offset":0,"length":195,"style":"fontsize-11pt"},{"offset":0,"length":195,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}},{"key":"13ghv","text":"There are also some popular safe pairs that traders try when they’re getting started, such as the US Dollar and the Swiss franc. Switzerland’s financial situation has been stable for a while, so many investors in the Forex market choose the pair as their safe haven.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":266,"style":"color-rgb(0,0,0)"},{"offset":0,"length":266,"style":"bgcolor-transparent"},{"offset":0,"length":266,"style":"fontsize-11pt"},{"offset":0,"length":266,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}}],"entityMap":{}}

Step 6: Understand the Positions of Forex Trading

{"blocks":[{"key":"f0sli","text":"When you’re a Forex trader, you’ll have a position in the currency pair you’re trading. The position describes the trade you have in progress. For example, an open position determines that you have market exposure. ","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":215,"style":"color-rgb(0,0,0)"},{"offset":0,"length":215,"style":"bgcolor-transparent"},{"offset":0,"length":215,"style":"fontsize-11pt"},{"offset":0,"length":215,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}},{"key":"47r8s","text":"Meanwhile, a long position means that you bought a currency and you’re waiting for its value to rise. In this case, when you resell the currency and gain your profit, the long position converts to a closed one because your trade is made.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":237,"style":"color-rgb(0,0,0)"},{"offset":0,"length":237,"style":"bgcolor-transparent"},{"offset":0,"length":237,"style":"fontsize-11pt"},{"offset":0,"length":237,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}},{"key":"9jpnc","text":"When you have a short position, it means that you’re selling a currency because you’re predicting that its value will fall, and you intend on repurchasing it for a lower price. When you do buy it again after its price drops, the position turns into a closed one.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":262,"style":"color-rgb(0,0,0)"},{"offset":0,"length":262,"style":"bgcolor-transparent"},{"offset":0,"length":262,"style":"fontsize-11pt"},{"offset":0,"length":262,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}}],"entityMap":{}}

Step 7: Don’t Beat Yourself Up

{"blocks":[{"key":"9sbrg","text":"One of the essential aspects of starting Forex trading is learning not to beat yourself over the spilled milk. Going into the trading market is risky, and you’ll inevitably have some setbacks.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":192,"style":"color-rgb(0,0,0)"},{"offset":0,"length":192,"style":"bgcolor-transparent"},{"offset":0,"length":192,"style":"fontsize-11pt"},{"offset":0,"length":192,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}},{"key":"enhcd","text":"Try to avoid asking questions like, ‘should I have stayed in my position for longer?’ They’ll only cause you to be disappointed—making such mistakes is totally normal in the currency exchange world.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":198,"style":"color-rgb(0,0,0)"},{"offset":0,"length":198,"style":"bgcolor-transparent"},{"offset":0,"length":198,"style":"fontsize-11pt"},{"offset":0,"length":198,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}},{"key":"9rubr","text":"Remember not to get carried away by unanswered questions and trading positions. Keep your mind purely analytical without getting emotionally attached to your decisions. This way, you’ll be able to make your decisions with a clear mind.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":235,"style":"color-rgb(0,0,0)"},{"offset":0,"length":235,"style":"bgcolor-transparent"},{"offset":0,"length":235,"style":"fontsize-11pt"},{"offset":0,"length":235,"style":"fontfamily-Arial"}],"entityRanges":[],"data":{}}],"entityMap":{}}