If you want to learn how to trade currencies, it’s important to follow several key steps in order to be successful. If you don’t already have a financial background, it’s important to first educate yourself on the basics of forex trading and then start trading with small amounts of money until you get the hang of it. Here are eight steps you can take to learn forex trading successfully and safely.
Step 1: Pick the Right Exchange
There are many options for forex trading, but not all exchanges are equal. Factors like reliability, performance and customer service should be top of mind when choosing an exchange. Popular options include: Nadex (CFTC-regulated), Plus500 and EasyMarkets (CySEC-regulated).
Once you've chosen the right exchange, create your account by providing the necessary information such as email address, desired username and password. Make sure you choose a secure password with at least eight characters that combines both numbers and letters.
Step 2: create an Account with a Broker
create an account with a forex broker that offers forex trading courses for free. Note: Forex brokers differ significantly in their platforms, fees, and whether they offer educational content. Before signing up with a particular forex broker, take time to review its platform and test it out. As you get more comfortable with each broker’s platform and educational offerings, you may want to make your decision based on which broker better suits your investment goals or learning style.
Step 3: Fund Your Account
For new traders, you’ll have to set up a trading account before you can place trades. Opening an account with a forex broker is fairly simple and only takes a few minutes. After you’ve verified your account, make sure you fund it with at least $250 so that you can start trading. Remember that if your account balance drops below $250, you may be charged fees or interest when it goes back up above $250 again.
Step 4: Start Learning
Learning how to learn forex trading, step-by-step is extremely important. The markets are incredibly volatile and without having a solid foundation of forex trading basics, your chances of success will be significantly reduced. So what can you do? Why not learn forex for free? There are numerous online courses which offer high quality content. Simply looking around and selecting a course that fits your schedule and needs will go a long way towards helping you succeed in your endeavors. If you want fast results then you have got to put in some work.
I would suggest starting with the basics: Forex trading platforms, Online forex trading, and forex online. For instance, there are many different platforms available such as fintech or Dukascopy Bank - but what one should I use? The answer to this question is simple: just pick one! However it's worth mentioning that there are a few things you should consider before jumping in head first.
Understand Risk Management
While risk and rewards are inextricably linked, there’s no reason for you to take unnecessary risks when trading. Use a stop-loss strategy whenever you can. Even if your profits far outweigh potential losses on a given trade, it’s wise (and likely recommended) that you mitigate those losses as much as possible. Stop-losses also give you leverage during negotiations, meaning you can ask for better prices when buying or better rates when selling.
Set Goals
Before you start trading, sit down and think about what exactly you’re trying to accomplish with your forex trading. Will you be day trading or swing trading? Are you looking for a long-term investment? Do you want quick, high-return trades, or slow and steady wins over time? If you’re just starting out, consider starting small and taking it slow—even if it means that your profits are smaller at first.
If You Want to Become Professional, Choose your Mentor Carefully!
If you want to get involved in a foreign exchange business, make sure you have someone that is willing and able to teach you. Because currency trading is rather complicated, if you are going it alone then things can get difficult. You need someone with lots of experience that has already developed strategies for success as a forex trader. One way or another, find yourself an experienced mentor!
Take Part in Live Trading Rooms
Before making your first forex trade, we recommend attending free trading rooms online. Here you can learn from experienced traders and get used to interacting with other traders before venturing out into the real world. This will give you a better idea of what goes on an actual trading room environment. You’ll also be able to put a face and personality behind these names as well as ask them questions about things that are not covered during training sessions.
Find the Right Copy Signals and Patterns on Charts
There are hundreds of indicators and chart patterns out there, but not all of them will be relevant for every type of trader. Before jumping in and risking your hard-earned cash, do your research. Read about different strategies, learning how they work, which ones match your personality best, and how you can benefit from implementing them in your own trading.
Compare the pros and cons of each strategy so that you know what's best for you. Once you have found a strategy that matches with your needs, learn the specific indicators or charts patterns that can give insight into its effectiveness. Study it carefully so that when it is time to apply it to your own trading account, it will be second nature.