This website is intended for beginners, newcomers, and anybody else with interest in the FOREX trading market. By following this FOREX guide you will learn all the basics and be ready to start trading FOREX online. Welcome to the fascinating world of FOREX… Enjoy the adventures!
FOREX stands for Foreign Exchange market, also known as FX or currency trading. With over $5 trillion traded a day, it is the largest market in the world. It involves trading one currency against another in an attempt to make a profit by buying low and selling high as the price goes up.
Some of the most traded currencies in the foreign exchange around the world are US Dollar (USD), European Euro (EUR), Japanese Yen (JPY), British Pound (GBP), Swiss Franc (CHF), and the Canadian Dollar (CAD).
Today, in modern days of FOREX trading. The supply and demand for a specific currency, or its respective value. Are the driving factors in determining market exchange rates.
Increasing opportunities and decreasing obstacles. Like the fall of communism and the fast-paced growth of the Asian and Latin American economies.
These factors have created new opportunities for FOREX investors. Leading to increasingly large amounts of foreign currencies flowing into other countries’ banks.
In FOREX until the 1990s. Only rich people could play this “game”. Want-to-be traders were initially required to have over $10,000,000 (million!) to invest and start trading. Not fair and strange indeed. Like I say: Trading FOREX wasn’t always easy.
FOREX was originally intended for use by Bankers and other large Institutions. Not by the majority of us, the “people with smaller wallets”.
However, due to the rise and evolution of the internet. FOREX Brokers can now offer trading accounts to anybody with interest in the FOREX market. You can start trading FOREX with as little as $1 (Cent/Micro accounts).
You can even start trading on a real account for free. By using “new member welcome Bonus” credit offered by many brokers. This is to attract new clients. And provide the ability to start trading FOREX without using your own money.
Anybody with a computer and internet access can start trading foreign exchange by opening a free account with an online broker and downloading the trading platform.
As a beginner, you must first start with a free Demo account to practice, which does not involve real money. This is to prevent you from making a big mistake and accidentally losing some of your money.
Since you are new to FOREX it is normal that you lack the experience, knowledge, and confidence. This can often lead to mind-block, bad decision making or opening random trades without first thinking it through (analyzing the market).
Let me ask you something. Do you want to be a FOREX trader? If so then you are at the right place. Keep reading and we will make it happen. You can and will be a FOREX trader. Life WAS meant to be easy; other people make it hard.
If you are low on money or financially in debt, then now is not a good time to start trading FOREX with real money. Forex trading is not for everybody because it is risky and can lead to loss of money or even bankruptcy.
Though there is no problem with opening a Demo account to start practicing, learning, and developing your trading strategies. Practice and experience will shape your trading abilities.
You must carefully consider your financial situation, needs, and level of experience. Do not risk something you cannot afford to lose. In trading FOREX there is always risk involved.
The best way to learn to trade FOREX is with a demo account or a Cent/Micro account type. Try it and see what trading currency is all about. Make money with money – To me, this is the most direct and enjoyable way of making an average to above average monthly income from the comfort of my home.
Who needs a boss when you can be your own boss, doing something you enjoy. You don’t need the stress and frustration working a regular low wage job. Most likely doing something you absolutely have no interest in. Yet you keep waking up in the mornings, going to work.
And after a while, you realize you are stuck in a loop. Every day is “the same” and just keeps repeating! This kind of stress and frustration is bad for your health. You are there just for the money because you need it.
The foreign exchange market is open Monday to Friday 24 hours a day. The market is usually slow on Mondays and can be volatile on Fridays. It involves high risk and can be dangerous for beginners.
My advice for beginners is to first start learning on a Demo trading account. Or open a Cent/Micro Account because the lot size is very small and you can trade safely (Micro Account lot size 0.01 is only a small fraction of a Standard account lot size).
With a Cent or Micro account, you can get started trading FOREX with as little as $1 to $5. As you start out and still learning you should avoid trading on Fridays. Because this is the most volatile day of the trading week. The market can quickly go against you and money can be lost in the blink of an eye.
Also, another way to safely start trading is to find brokers who offer “New Member No Deposit Welcome Bonus”. You can start trading on a real account, no deposit required, and no credit card. Just your name and email are required.
After that, the broker will send your Trader Login ID and Password to your email. You can then log in to your new trading account on your PC, Smartphone, and Tablet.
You can download the mobile MetaTrader 4 or MetaTrader 5 app for Android and iPhone devices. Click here to view available FOREX New Member No Deposit Welcome Bonuses.
Last but not least: Both beginners and experienced traders use various FOREX “tools” to help them make the best possible trading decisions. Never trade blindly (referred to as “naked trading”). FOREX is not gambling if you trade the correct way.
A FOREX Indicator has the ability to predict market trends. Usually, you receive a green Up arrow indicating an uptrend. If you agree with the prediction you can then place a Buy order.
The same but opposite applies for predicting an upcoming downtrend: You get a red Down arrow and can decide to open a Sell order if you are confident. For accurate FOREX Indicators please check the FOREX Indicators section.
You will need to find an online broker to open an account with. For a list of recommended FOREX brokers click here. After you make a decision which broker you want to use you will then need to create a demo account to learn and practice.
This is very important to avoid trouble and losing money! I recommend you practice with the demo account for at least 2 months before you decide to start trading with real money. Because then when you lose you will not be losing real money.
When you start looking for an online broker to open an account with, first make sure they provide free demo accounts to practice. Most brokers do provide demo accounts but maybe not all. A demo account works just like a real account, it is synchronized with the real-time stock market so all quotes and currency rates are exactly the same as they are with a real account.
Practice and patience will help prepare you for what to expect when you start trading with a Real Trading Account.
Which FOREX broker should you open a trading account with? There are many FOREX brokers to choose from and they are not all the same. Beginner traders and newcomers to the FOREX market may find it confusing and difficult to choose which broker is best suited for them.
Before you start comparing brokers you will need to know what it is that you are looking for and what will best cover your needs. One size fits all is not the case when it comes to selecting a broker. Here are a guide and advice on how to choose the right FOREX broker. View ForexGuide’s Recommended Brokers List.
Trading platforms are required software which you install on your computer. It is your business tool which you will use to buy and sell foreign exchange currencies.
Trading Platforms allow traders to place and monitor trades, open trades, close trades, keep an eye on real-time charts and much more. One of the best and most widely used electronic trading platforms is MetaTrader 4 and MetaTrader 5 by MetaQuotes Software Corp.
There are several brokers who also have the option of allowing their clients to trade directly in the web browser, without the need for installing any software.
I recommend installing a trading platform such as MetaTrader 4, it is free and runs great even on older low spec computers. This is the only platform I ever use. I use it on my PC and my mobile devices. How to install, set up and start using a trading platform, click here.
Forex signals allow traders automatically and in real time copy trades of other traders. They are usually trade strategies provided by experienced traders who provide the signal for others to copy their trades.
This type of service usually costs a monthly subscription fee, though many traders provide these signals free of charge.
When the signal provider executes trades, such as opening and closing trades, everything will be copied automatically to the signal subscriber’s (you, the signal receiver) trade account. This means everything is automated and happens in real time.
If the signal provider makes money, then you also make money. To subscribe to such signals you will need to have a trading account with a FOREX broker and install a trading platform.
I recommend installing MetaTrader 4 or 5 for signals and for all types of trading in general. You need to leave your computer running 24/7 with MetaTrader 4 running. Or you can rent a VPS (Virtual Private Server).
This will ensure that all trades are copied and executed and not miss out, because if the trading platform is not open and if your computer (or VPS) is not running, you will not receive copied trades executed by your signal provider.
There are several factors which determine and cause fluctuations in exchange rates. The main contributing elements are economic factors, political conditions, and market psychology.
It can be just one single factor or a mixture of several factors which will result in movement of the market.
The outcomes of those fluctuations will be of advantage to some traders and disadvantage to others, depending on your position.
You will need to be familiar with the commonly used FOREX trading terms to get a better understanding of currency trading. There is much more to bulls and bears than you thought, and TP (Take Profit) and SL (Stop Loss) are not the only terms you need to understand and remember. Learn more about FOREX trading terminology: Learn the FOREX language.
Important things to know and consider before you start trading FOREX. Trading in the Forex market is a good, enjoyable but challenging opportunity.
However, before deciding to get involved in trading FOREX, you should carefully consider your investment objectives, level of experience and risk appetite.
It is of uttermost importance to never invest money you cannot afford to lose. There is high exposure to risk in any foreign exchange transaction you perform. Any instance of buying or selling is risky.
The leveraged and volatile nature of FOREX trading means that any market movement will have an equally proportional effect on your deposited funds: It can work for you or against you. A high possibility exists that you could sustain a total loss of your deposited funds.
As a FOREX investor, you can lower the exposure to risk by employing risk-reducing (risk limiting) strategies such as Stop Loss or Stop Limit orders.
Using low Leverage set at your broker is also a good, and perhaps most important way to limit risk and protect your trading account. You can change (increase) your Leverage ratio as your experience grows.
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