7 Key Tips on How to Start Trading Forex
Learning how to trade in the Foreign Exchange Market (also known as Forex) can be quite the formidable task, especially if you’re a beginner. However, we at Trading Education claim that it’s certainly not impossible to become an effective trader, as long as you are willing to dedicate time and prepare yourself accordingly.
The forex market carries some appealing characteristics that attract more and more people with each passing day. Not only does the forex market trade around $5 trillion on a daily basis but also since it doesn’t have a physical centralized location, it operates via a global network of trading communities, such as individuals, banks and businesses. That means that you can conveniently trade online whenever you wish to. Forex can also become an exciting hobby and an additional source of income. For all these reasons and more, many start wondering how to start trading forex and build the foundation needed to be a confident and profitable trader. In the following article, the team of Trading Education has listed 7 key tips on forex trading for beginners. The following mini-guide is dedicated to the beginner traders who have the enthusiasm and desire to learn how to trade forex but are not sure where and how to begin with. Enjoy the following suggestions and let us know if you have any questions. Remember, the team of Trading Education is always here to assist those who want to learn how to trade on their journey.
Step 1: Learn how to trade by taking a free forex trading course
The first step towards achieving your goal of learning how to trade is getting proper trading education. Naturally, you can’t expect to be successful at something, without dedicating time to learn as much as you can about it. It’s difficult to label forex as more or less difficult than the other financial markets but one thing is for sure - learning forex is a serious deal that includes a lot of understanding of both terminology as well as technology and most importantly - how to develop your strategy and manage the risks involved. However, there’s little to fear about if you take the right course and learn all you need to know about forex trading. Trading Education is one of those places where you can receive high-quality trading education, covering all the specifics you need as a beginner with a passion to learn how to trade. The courses available at Trading Education are suitable for beginners and are also conveniently available online for when the student has time. Moreover, the course incorporates interactive materials, educational videos, webinars, presentations, one-to-one consultations and more. Due to the partnerships we have established with some of the top trading platforms, we are able to offer the course for free. You can find out more information about the course, what it covers and more here.
Step 2: Test your knowledge with Free Quizzes to make sure you've learned all the necessary information about Forex Trading
After you’ve dedicated a significant amount of time to learn the fundamental aspects of forex trading, your next step should be testing your knowledge. Absorbing a lot of information and immediately jumping right into the deep trading ocean might not be such a good idea. That’s why we suggest putting your knowledge to the test with free quizzes. In addition to offering a free trading course, Trading Education has also prepared a series of quizzes, designed to test your trading knowledge. This type of self-testing can not only give you an idea of what are the trading areas you still need to work but also help you with your confidence. The free Trading Education quizzes are available on the official website and can be taken at any time. Make sure you’ve covered all the information from the course before moving on to the quiz and don’t get discouraged if you didn’t get a good score. The trading education materials will always be available to you so you can go back and re-read the parts you didn’t fully understand at any time.
Step 3: Set up a trading account. Be extra careful when you pick your brokers.
Once you feel confident enough in your trading knowledge, it’s time to get into the real world of trading. The next step on our list of tips on how to start trading forex is setting up a trading account. Remember, move on to step 3 once you’ve armed yourself with knowledge, confidence and motivation.
When you start picking up your broker, you need to make sure you do your research and avoid all the scam brokers out there. We, at Trading Education, have established partnerships with some of the most notable brokers out there to make sure our students/future traders avoid the pitfalls of working with scam brokers. We have done our research and can help you choose a suitable broker for you. Check them out on our official website.
Step 4: Craft a Trading Plan
Once you’ve opened up an account at a broker of your choice, it’s time for you to sit down and carefully set up your goals. It’s good to shoot for the stars but you have to be realistic and consider your level of experience, psychological preparation, the investment you can make, all the risks involved, etc. The FX market surely offers plenty of roads that lead to success. However, you might find yourself at a dead end road unless you figure out your strengths and weaknesses and come up with a good plan. Are you comfortable with the broker you chose? Are you confident to follow the signals? Have you set your exit rules? Do you know where your exits are and what are your profit targets? All these things should be taken into consideration for your trading plan. Moreover, you should also know how to calculate the odds and whether they are in your favor or not. After all, you want to minimize your losses but keep in mind that you cannot avoid them. One of the main principles you need to understand and prepare yourself in trading is that you can’t win without losing.
Step 5: Never stop learning and keep updating yourself on what’s happening in the market
Just like with any other financial market or as a matter of fact, with pretty much every area and aspect of our lives, one thing we have to remember is to strive for improvement and never be satisfied with your current level of knowledge. When it comes to forex trading, you need to know what’s happening in the market because in most of the times, a little piece of information you missed out on or a lack of understanding on the different features of trading softwares can be the reason why you lose money. Traders should build a habit of checking the news on a regular basis and update themselves with the latest market movements, technological advancements, innovations and new big players and brokers.
Furthermore, never forget that practice makes perfect. Probably the best way to learn how to do things is by keep on doing them. Come back to those notes you took during your Trading Education course, ask questions, watch videos and open the news pages every day - these are just some of the things you can do to help your future trading career.
Step 6: Be active and don’t be afraid to lose some trades.
If you’ve been a trader for a long time now, you are probably used to the idea that losses are part of trading and you shouldn’t be emotional over a loss. However, for beginner traders, the fear of losing might play a huge role and eventually prevent them from succeeding. It’s advisable for beginners to start with a small risk and increase the risk percentage in time, once they’ve conquered their fear.
Being active is recommended, however, at the same time it’s important to progress slowly but steadily. At the beginning of their trading journey, many traders quickly exit the trade out of fear of losing profits, making the wrong choices or missing on other trading opportunities. However, sometimes because of all that hesitation, uncertainty and fear, they miss out on earnings as the trade might end up reaching their target profit without them participating.
To sum it up, emotions such as greed and fear are not your friends and you should learn how to control them. Trading psychology plays a role in trading and as long as you stay positive and confident, you are going to achieve your goals. Believe in yourself and your knowledge and learn to control and make well-calculated decisions.
Step 7: Analyse your performance and results and draw meaningful conclusions
Naturally, we have to be our own biggest critic. Whether you get out of a trade as a winner or a loser, one thing is for sure - you have to figure out what you did right and what you did wrong. Analysing the results of your trade can give you a clear idea of what you need to learn and which areas require improvement.
Some traders, especially the amateur ones, are blaming their losses and repeated failures on every other fact and circumstance rather than understand how their own decisions and probably lack of understanding led them to lose money. One suggestion, we at Trading Education can give you is to consider making a trading journal or an archive of some sort that will help you understand better why you had such an outcome and most importantly, act as a subjective guide. Remember, once you’ve taken full responsibility for your actions and choices, you are ready to improve and develop your career as a professional trader.
Forex trading can certainly become an exciting new adventure for you. You can not only work from home and pretty much every place that has an Internet connection but you can also enjoy all the financial perks that can come once you’ve become an efficient trader.
Sometimes, however, at the very beginning of the trading journey, you might feel a little bit confused, scared and overwhelmed by all the information you have to accumulate. If learning is something you don’t feel like doing, forex is certainly not the place for you, though. The perks and benefits of forex trading don’t come that easily but once you’re there, success is not far away.
Trading offers great opportunities for additional profit however keep in mind that you need to dedicate a significant amount of time and effort to learn all the necessary details. Without a doubt, knowledge is the key to success. If you choose to rush and don’t prepare yourself accordingly, don’t be surprised of the negative outcomes. It is essential to take your time and do your research. Fortunately for you and all the others who have just started trading forex, Trading Education has your back.
Our team has listed the above-mentioned tips and guidelines to make sure our amateur traders are well-informed and prepared. Furthermore, we believe that if you’re a beginner, those tips are an absolute must. Learning, testing your knowledge, setting up an account, crafting a strategy, continuously updating yourself, being active and fearless and analysing your performance are the things that might bring you one step closer to fulfilling your dreams. There’s no better time to start than now.
Contact Trading Education for further assistance. We are here to help you on the long but rewarding road to forex trading.