Mention forex trading to the average person and they won’t have a clue what you are talking about. Try to explain it and most people will have even less of a clue. If you understand what forex trading is and you are interested in getting started this is the article for you.
Forex trading is not a get rich quick scheme and it certainly is not easy money but it can be very rewarding. Being a forex trader allows you to work on your own time as the markets are open 24 hours a day 5 days per week and the sky’s the limit when it comes to potential in the forex world (unfortunately the same can be said for the risk as well). So let’s look at how you would get started. We’ll be looking at forex trading platforms, forex trading signals, how to pick a broker and what your first steps should be.
Where can I learn to trade?
There are many options when learning to trade such as:
- Free Online Courses: There are a number of online courses you can do for free, these won’t necessarily provide you with a strategy but they will give you a good grounding of the basics.
- Paid Online Courses: The internet is awash with paid forex training programmes, often training you to use a specific strategy or providing forex trading signals. Just make sure there are legitimate reviews as these often turn out to just be money making schemes.
- YouTube Videos: There is tonnes of free information on YouTube. The only downside is knowing what information to look for.
- Books: You can still learn Forex the old fashioned way and open up a book.
- Joining a Prop Firm That Provides Training: Again ensure this is a reputable prop firm by looking for legitimate reviews.
Personally I would recommend doing your own research and trying to find a mentor who can help you build a strategy that works for you whilst trading a demo account. This brings us to our next section.
Begin trading a demo account
This step is so important and often overlooked by eager new forex traders. A demo account allows you to trade a fake account with live price action. It might be frustrating when you want to get your teeth into trading real money but its going to save a lot of heartache and real cash losses if you start on a demo account. I would recommend building your strategy and being “profitable” on a demo account for 6-12 months consistently before you open a real account and start trading your capital. So let’s look at how to choose a broker for your demo account.
Choosing a broker
It is not a necessity to trade your demo account with the broker you will use for your live account but it is recommended. When looking for a broker you should be looking at what instruments are available to trade, how much they charge on commission per trade and how wide the spreads are. The spreads are the difference between the bid and the ask price and can end up costing you a lot of money if they have “wide” spreads. Again, look for reviews and go with a well known reputable broker.
Choosing a platform
You also need to choose a forex trading platform. The most popular is the MT4 platform as this allows for one click trading but other examples include MT5, TradeStation, cTrader and currenex. Choosing the right forex trading platform is important as it provides the tools for trading Forex so ensure you choose the right one for you.
Forex trading signals
A forex trading signal is what tells you to enter or exit a trade. A well-built strategy gives clear forex signals. You can however buy or subscribe to forex trading signal groups. Unfortunately, it can be a bit of a minefield as you can be subjected to scams, “Pump and dump” schemes and false signals, they can also be very costly.
If you are well prepared before you trade a dime of your real money you can take the emotion and stress out of forex trading and have a much better shot of being a smart and consistently profitable trader.