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Forex Trading: A New Journey

Forex Trading: A New Journey


So you’re setting out on your Forex Trading journey.

Maybe you have heard from a friend who trades how exciting these markets can be and you want a piece of the action.

Or perhaps you’re getting serious about making a difference to your financial future and see Forex trading as the right vehicle for you.

You could even just be browsing, wondering what all the fuss is about.

No matter your motivations, you have come to the right place. Contained within is the essential information you need to:

  1. Know exactly what Forex Trading is
  2. Understand the benefits of Forex trading
  3. Find out if Forex trading is for you
  4. Learn what tools you need to trade Forex
  5. Get started trading Forex.

Forex trading is exciting and rewarding, and for those that are disciplined and persistent in the application of the principles of good Forex trading can be very lucrative too.

What is Forex trading?

Forex trading is actually quite simple in practice.

At its most basic level, all you are doing is placing a trade on a currency hoping it is going to go up in price. For example you might think that the Euro is going to go up in value against the Australian dollar then you could place a trade to buy the EUR/AUD currency pair. If the Euro subsequently rises you would make a profit, if it drops you would have a loss. If you think that the Euro is going to go down you could place a trade that would benefit from that move too. This can all be done very easily in an on-line trading platform.

Forex traders study country fundamentals and market news along with price charts to help determine the direction that the currency might go. While this may seem complicated at first, the more experienced traders tend to focus on simplicity, as they realize that their success is more about their trading psychology rather than a fancy entry.

Forex Trading Chart

What are the benefits of Forex trading?

Forex trading offers several benefits to the discerning market participant. Here are the top three.

  1. Forex markets are open 24 hours. You can trade currency 24 hours a day for 5.5 days a week. This means you won’t experience overnight gaps like you would in the stock market, and can trade in the evenings if you work during the day.
  2. Forex markets are low-cost. When you trade Forex, instead of paying a commission like you would with shares, you instead pay a very small mark-up to the price called the spread. Typically the spread is only a fraction of a cent for each dollar you trade.
  3. Forex markets allow you to start small. When you begin Forex trading you can start at a very small size, and as your commissions are small too, unlike with stocks your profits don’t get all eaten up by commission.

To view a complete round up of the benefits of Forex trading you can check out this cool Gifographic.

Who should trade Forex?

Perhaps you are a first timer to the markets, or a seasoned stock or futures trader looking for something different, either way the Forex markets are likely to suit you. In fact the Forex markets are particularly popular for any of the following:

  • New Traders getting started in the markets
  • Day Traders placing several trades a day
  • Swing Traders holding trades for a few days
  • Carry Traders holding positions for weeks or months
  • Full time employees trading in the evening
  • Part-time workers looking for ways to supplement their income
  • Traders who wish to trade from their mobile devices

What tools and resources do you need for Forex trading?

The temptation for new traders is to spend a lot of time researching which trading platform to use, or looking for the latest technology edge. But the reality is the new trader does not really know what they are going to need until they uncover their trading style. This means the new trader is much better to simply begin with the basics and focus on learning enough to get started with a minimum of risk.

This means that to begin all you need is:

As you advance in your trading you might find these tools of use:

You could also consider following more experienced traders using copy trading technology. Here are some resources for this:

How to get started with Forex trading

Here is a simple plan for how you can get started with a minimum of fuss.

  1. Get your practice account
  2. Watch the instruction videos for the practice account
  3. Go through this Forex course
  4. Place 10 trades in your practice account with a 50 pip-stop loss and a 100 pip profit target.

By placing some practice trades in a disciplined manner you will start to get a good feel for what it is all about. You can then read the following articles to get a handle on your trading strategy.

You will also want to watch out for these Forex trading mistakes and work on your trading psychology in these articles.

If you get stuck at all you can have a free call with one of our sales traders who are experienced in directing new traders to the information they need to progress in their success.


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