If you’ve searched for “Learn Forex Trading” or “Forex Trading Online”, you might be new into the race of Forex trading. Patience and dedication is all you need to learn forex trading. The good thing about trading in the forex market is you don’t need to invest a huge amount to get started. As a beginner forex trader, you can even start with $10 or even less. However, it is always recommended to start with a Demo account before opening a real account with a forex broker.
Before we jump directly into the topic. What is Forex Trading? In simple words, Forex trading is buying and selling of currencies. It is completely online and you can buy or sell any currency with just one click. According to the Bank for International Settlements, Forex is one of the biggest markets which is averaged $6.6 trillion per day in April 2019. Thus, we can say it is the biggest industry to jump on and earn hefty profits. This doesn’t mean that the path to becoming a pro forex trader is easy. It needs a lot of knowledge and experience to make good profits. In the world of trading, the rule is simple – One makes a profit and other losses. In the forex market, you’ll not only compete with individual forex traders but with giant institutions that use sophisticated AI-based trading systems which is hard to beat.
Here are the few step-by-step guidelines you need to follow to learn forex trading as a beginner.
- Learning Basic Forex Terminology Online
- Read Forex Trading Books
- Know Forex Trading Regulations of Your Country
- Open Demo Account with Forex Broker
- Starting Forex Trading by Analyzing markets
Let’s dive deep into each step!
Step 1: Learning Basic Forex Terminology Online
Before directly jumping into buying and selling of currencies, you must know the basic terminology. It will help you to know exactly what is forex market. Some of the most common terms which you will deal with are Base currency, Quote currency, Exchange rate, Long and short position, Bid and ask rate, spread, etc.
You can learn forex terminology easily by following some highly reputed online platforms such as Investopedia. Moreover, at a very early start, don’t think of buying online courses as you’ll get a free Online course for beginner forex trading. Instead, you can save that money for real forex trading. It will give you experience even if you lose your money.
Step 2: Read Forex Trading Books
The second step, you should consider is to buy an e-book or physical book. By following an experienced author, you’ll get to know exactly what forex trading is and how to make a profit in the Forex market. Reading a book not only gives you a complete understanding of the market but also the confidence to jump to the next step. Some of the books which I recommend to the beginner traders are as follows:
- Currency Trading for Dummies, by Brian Dolan
- Day Trading and Swing Trading the Currency Market, by Kathy Lien
- Forex Trading: The Basics Explained in Simple Terms, by Jim Brown
Step 3: Know Forex Trading Regulations of Your Country
Knowing the forex trading regulation in your country is the most important. Some countries have restrictions on forex trading. You must know the currency pair you’re allowed to trade and rules and regulations you need to follow for the country which you’re based in.
For example, if you’re from USA then you can read US SEC rules and guidelines from the SEC website.
Did you know?
Over 1/3rd of the Forex trades are generated from the United Kingdom (UK)
Step 4: Open Demo Account with Forex Broker
Some of the beginner traders directly start their forex market journey by opening a real trading account with the forex broker. By doing this, you might fall into a trap with a scam forex broker and lose all your money. Paper trading is the best practice for beginners. Later opening a demo account with the forex broker to get some experience with the trading platform. By opening the demo forex trading account you’ll get to know some important terms which you might not be knowing even after reading the books mentioned below.
In that case, you can learn those terms from the website named BabyPips. This website will help you to dive deep into the forex trading world.
Step 5: Starting Forex Trading by Analyzing Markets
And here you go! Start your journey by opening a real forex trading account with a reputed forex broker. It is recommended to invest a small amount at the beginning. There are some forex brokers which will allow you to deposit a minimum of $10 and start forex trading. In this case, the risk gets lower and you will gain experience with less money.
As the forex market is global, you must be aware of the latest news and events going on in the market. Also, technical and fundamental analysis also plays a very crucial role in forex trading. Analyzing the market accurately results in making good profits. Before you place an order, try to make technical, fundamental and sentimental analysis for every trade you do.
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