Forex means foreign exchange. When you trade Forex you’re trading one currency against another. You look for fluctuations in a certain currency against another and you can make a profit. Although this sounds easy, it really isn’t. Some of the best minds in the world struggle to make a profit with this form of investing.
Not to worry though, in this Forex trading guide we’ve put together some basic information to get you going. These are more so tips than a guide. You can find plenty of basic how to guides all over the internet.
Make sure you understand what the different currency pairs are
In Forex trading there are several currency pairs, but you’ll only have to become familiar with the main ones in order to be successful. This should be easy to do. When you sign up to any Forex broker they’ll list their most commonly trades pairs.
Try to understand what pairs of currencies are most frequently traded and why
This is going off of the first point to a degree, but you need to make an effort to understand what the most common currency pairs are that get traded. It’s going to be tempting to go away from these, but these are frequently traded for a reason. Try to understand the reasons and build a method around this.
Educate yourself on the terminology as this will help you navigate the trading process
What gets a lot of traders confused is not understanding the terminology that comes with Forex. This is easy to overcome. You can go to a website like Investopedia in order to get a basic rundown of Forex trading terms and meanings. Study this carefully as this will really help you if you’re just getting started.
Be sure you know about the market opening times in different parts of the world
One of the best things about the Forex market is that it’s open 24 hours a day. You have the potential to make lots of trades and find lots of potentially profitable opportunities. Learn what the trading times are in different parts of the world as this will help you a lot. You might have to base your schedule around when certain markets open.
Learn what influences currency fluctuations or dips so you can specialize
There are all sorts of reasons why a currency might dip. You need to learn about these reasons and get into the habit of predicting the moves. It doesn’t stop here. You have to get into the habit of watching/reading different news sites, because small things can have a big effect on currencies around the world.
Hopefully this simple Forex trading guide has helped you to some degree. Understand that unlike other forms of investing you don’t have to be some kind of genius in order to make money. You also don’t have to have a lot of cash. You can open up a mini account for a few hundred dollars. We recommend looking at some simple guides and learning some simple strategies before getting seriously involved.