How to Stop Being a Forex Trading Noob
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Are you a forex trading newbie? There’s no shame in it. Foreign currency exchange can be quite tricky and it’s not exactly taught at schools. Gaining the knowledge to participate in the forex market could make you quite a bit money, provided you know what you’re doing. So, let’s fill you in.
Forex Trading for Noobs
Noob can be quite a crude term, but everybody starts out of a newbie at the beginning. The first step towards overcoming that is to know the basic principles of forex.
Know about the meat and bones of forex – buying and selling. At its core, the foreign currency exchange market is about buying low and selling high. The simplest concept is also the hardest to implement.
Luckily, the market can be analysed. While the trends and values often trace their beginning to factors we can’t know in advance, the reactions of the market are often predictable.
Why? Because the human mind is often more predictable. The instincts for self-preservation often seep into trading. Buying and selling aren’t always based on good analysis, but on gut feelings, many traders can’t back up with facts. That’s why you need analytical techniques.
Fundamental and technical analysis
When analysing, you’ll have to look at the numbers, charts, the basis of the business on a fundamental level. They may sound quite tricky for forex noobs, but it’s actually not that hard to understand if you enrol in the right trading courses for beginners.
It all comes down to looking at the data and predicting where things are going to land, not too dissimilar to watching a football game. The rules are always the same and there are things that are more likely to happen than others.
Forex trading isn’t sports gambling (or any sort of gambling), it’s merely a system that many stable entities, including nation-states, rely on. You can do it as well, provided you’re ready to learn how to do it.
Forex Finance for Noobs
If there’s any lesson to learn from forex trading, it’s that no values stay constant. Things go up and down constantly. Understanding that is the essence of making money.
However, there are other lessons to learn. Your money changes in value and you must adapt to that change.
Inflation is eating away at your money. Your savings usually loses about 2% of its value depending on where you’re located.
States like to inflate the value of money for various reasons, the main one being to stimulate their flow.
If the value of money just stayed the same, all rich people would have just locked up their money and economic stagnation would follow.
Instead, this inflation makes people want to invest their savings and move them around, thus providing more potential for wealth distribution around the market.
It may sound unfair for those that just want to save up money, but that system may benefit them by proving more investment, a more active economy, and more opportunities for employment.
You might also like: 8 Questions to Answer Before You Make an Investment
Why Savers Don’t Make Money
The inflation ensures that saving up money actually means losing them, so you should start investing. Forex trading is a good start.
But we have to be honest – more than 70% of forex traders lose money. Why? Because they don’t know what they are doing.
Some people mistake the forex marketplace for a gambling rig and rely on luck. This is perhaps the worst possible way to approach currency trading.
It’s true that some aspects of forex are so chaotic that not even the world’s top experts can predict them, but that doesn’t mean it’s just chaos.
You can understand forex trends provided you have the right knowledge. In the end, forex trading isn’t a hard thing to do on a technical level, you simply decide when to buy and sell, click several buttons on your app, and that’s it.
But when do you hit the buttons? This is the question that most people can’t right, which is why so many of them lose their investment.
Don’t be among that 70%. Learn about what makes the forex market tick and follow the pulse. Get educated If you want to stand the best chance of success!