If you’re looking for a trade to get into, one of the best trades around has got to be forex. This trade handles probably the most relevant thing circulating the globe, money. Forex stands for Foreign Exchange, so it’s basically a trade of money that helps you get money!
This trade attracts all sorts of traders, whether novices and seasoned, long and short, and even small and big traders. So you’re dealing with a trade that’s open 24/7 and is in high demand, so good numbers are promised.
Plus, this trade is known to be the largest trade, so you can bet on excellent liquidity. So if you’re now kinda curious about forex and how to start, below is everything you need to know:
What is Forex Trading?
Before you begin your forex trading career, you should first know what forex is. Knowing the trade, you want to get into is a crucial step before wagering your hard-earned cash. Of course, you want good odds of profit, and a way to do so is by knowing your trade like the back of your hand!
To give you an idea of what you’re dealing with, forex is a trade where you exchange currency on a decentralized market. How you profit from it by buying or selling them based on your speculation of the currency’s value.
How to Trade Forex?
Basically, how to trade forex is pretty simple to understand. In forex, you trade in pairs: the base currency and the quote currency. The base currency is what you have and want to trade. The quote currency is what you want in exchange for the base currency.
So, in a nutshell, the base currency is what you sell, and the quote currency is what you buy. Once you pick out your pair, you will be given the price.
How to Start a Forex Trading Career?
Now that you know the gist of forex trading, you can learn how to start your career with forex. To make it simple for you, down below is a step-by-step guide:
Step 1: Learn More About Forex Trading
Although you might already know what this trade is about, sadly, this isn’t enough. Trading is complex and volatile, so it’s essential to make accurate decisions, and an efficient way to do so is by really understanding and knowing what this trade is.
You can try self-study, attend webinars and seminars, get courses, subscribe to learning platforms, and so on. New trades usually overlook this step, which is why failing traders have grown in numbers annually.
Step 2: Find Out What Kind of Trader You Are
There are many ways to trade, whether you’re a short-termed or long-termed trader, a small or big trader, and so on. You’ll find a trading strategy that’ll suit your trading style. So before trading, find out what kind of trader you are.
To help you out, here’s a list of common types of traders:
- Day trader – A day trader opens and closes a trade within a day and profits from small market movements. Day traders usually hold trades for 4 hours max.
- Position trader – A position trader holds their trades for weeks, months, and even years. They aim to profit from grand market movements using fundamental factors.
- Swing trader – A swing trader holds their trade for days to weeks. Similar to day traders, they aim to profit from small market movements.
- Scalper – A scalper also opens and closes trades within a day, just like day trading, but what sets them apart is how quick scalping is. Scalpers usually hold their trades for only seconds to minutes.
Step 3: Choose a Trading Platform
Now it’s time to choose a platform! This is vital since available markets, trading fees, trading tools, and other features may vary depending on the platform you choose. So before you subscribe to any trading platform that catches your eye, consider knowing more about it.
Consider knowing its credibility and reputation, available markets, added fees, all the features they offer, and so on. To help you out, here’s a list of the best trading platforms for forex trading:
- InteractiveBrokers – Recommended for professionals.
- FOREX.com – Has one of the best offers.
- IG – This is the most credible and trusted one on the list.
- Saxo Bank – Offers the best web-trading platform.
- eToro – This is the best for copy and cryptocurrency trading.
Once you pick the one you like the most, you can start trading! If your chosen trading platform offers a demo account, you can consider practicing first. Demo accounts are a great way to practice without risking any money.