Known as the FX market or Forex, the foreign exchange market is the most traded market globally. It trades roughly $5.3 trillion a day. As an investor, you should be reminded to only invest what you can afford to lose.
In order to succeed in online trading, you must learn to analyze and learn the market’s background. Everything should be considered–the economic and geopolitical factors, the integral traders, and more.
Lowering the risk is your goal. Learn the market, monitor the changes, talk to traders, read business articles, and keep track of currency values’ changes.
To reduce these risks, you can practice trading online on a demo account first. This way, you will know the ins and outs before you risk your capital. If you are a first time trader, you are highly encouraged to open a demo account. This online forex demo account is 100% risk-free and easy to use. Available on various devices such as your personal computer or mobile, it can help you get to know more about the markets and to experience trading.
How to start Trading
Just because you are a novice in the trading game doesn’t mean you can’t get ahead. Make use of various techniques and see your progress. Here are some trading styles you might want to consider:
Scalping (Very Short Term) – Traders keep an eye on small price movements and targets gaining small profits daily. This is a reliable and safe style. You invest small, you earn small, but the risk is minimal. One advantage of scalping is that numerous traders engage in it because the profit targets are small and easy to achieve. You’re aiming at 10-20 pips movements, which can easily happen in mere minutes when the trends is strong.
Day Trading (Short Term) – Scalping takes place in only a matter of seconds to minutes. Day trading is handled during a single trading session. You enter a trade and exit it on the same day you entered. The key is to find a loophole or, as day traders call this “exploit intraday price fluctuations”. You monitor the intervals and the trading volumes to know the profit target you want. The only challenge, and also the way to success here, is non-stop monitoring. You can’t overlook one significant change or your entire progress will be lost for the day.
Swing Trading (Short Term) – This is also a form of short term trading but lasts from days to weeks. Other than performing analyses, swing traders need to keep an eye on price actions. This will be their opportunity to make a profit and get out. In short, you monitor security price changes. Patience is needed here.
Position Trading (Long Term) – You need fundamental, technical, and sentiment analysis for this one. Position traders are in it for the long haul. This is where you really need to evaluate every factor, economic stature, financial institutions, international trade, and more. Keep a “trader’s diary” of all the price charts and price fluctuations. In the end, you would want to invest in a rising market.
Learn to trade like a Pro
You don’t have to be an economist or market elite to trade productively in the Forex market. All you have to do is learn the basics, expand your learning, and embrace reading forex publications. You can start by reading electronic books on the basics like the following:
- how to trade Forex;
- what the risks in Forex are;
- what automated trading robots are;
- whether these robots are compatible with online trading platforms, that your broker offers.
There are a lot of questions to answer and the basics provide only general information. You need the specifics. You can also attend webinars, watch tutorial videos online, and communicate with other traders. The exchange of opinion in Forex is a must because you can learn from others’ experiences. The more you know; the less the risk.
I’m a single mother of 2 living in Utah writing about startups, business, marketing, entrepreneurship, and health. I also write for Inc, Score, Manta, and Newsblaze