The Forex market is no joke. Just the fact that its trading volume is roughly $5 trillion daily is enough to be impressed. They operate thanks to the internet. Forex is decentralized, meaning it works via banks, businesses, and other parties. The market is made for fast-paced traders, and it’s open worldwide. Its volatility is attractive, and there are multiple opportunities for making money.
To be able to become a forex trader, you should learn the basics, learn more, learn continuously, and with certified people. You will find out a lot about economics and politics, and you will be surprised how much better you will manage your income if you do it the right way. Let’s get started!
What is the Forex market?
The Forex market trades only with digital assets, and it stands for foreign exchange. They are trading 24/7 thanks to their digital base and can make a profit thanks to constant exchanges. The current volume of exchange is roughly $100 billion a day!
Terms you should memorize since they will appear regularly are:
- Spot trading – this is a term for an immediate exchange of currencies, which means it is done on the spot as the name implies
- PIP is often very confusing to new traders, but it can be explained: it represents the fifth decimal of a currency price (rarely fourth decimal).
- Bullish and Bearish – These terms represent whether the price is going up or down and if you should buy or sell something. These terms are derived from the story about old fights between bears and bulls, where the bull would attack the bear right away (the price will rise), while the bear was going lower, trying to defend himself (the price is likely to go down).
You don’t have to invest thousands of dollars.
Since forex is more accessible than other trading types, it’s easy to start on your computer, your phone, or anywhere where you have access to the internet. It is also a myth you have to invest lots of money right away (if somebody says so, then it’s probably a scam). You should start small by opening an account and trading with only a dollar if you want to. It is up to you and how much you are ready and know you are comfortable with losing. In many kinds of economic activity, you must be able to calculate or forecast profit. That is why we accentuate so much learning and being informed. By learning about trading, you know about money patterns you have and how you should manage your income and investments. Forex is an investment as well, and you shouldn’t look at it otherwise. By trying to calculate your profit, with the help of a broker or software, you can lessen the chances of loss, especially if you start investing more money.
Always check who you’re working with
If you are ready to open an account with a brokerage firm, check it on the internet before investing. You can easily google it and see reviews if they have regulation and therefore avoid being scammed. Your broker should be regulated, and there shouldn’t be a problem finding him on the internet and checking his professional background. Customer support should always be at your fingertips, and your broker should be working to make you a profitable trader, not to take all the money you have.
Money doesn’t grow on trees.
False advertisement leads to false beliefs, and that leads to bad decisions. Don’t trust commercials that say you will get a million with a hundred dollar trade, without any experience. Like everywhere, you have to put in the work, time, and stay away from clickbait! Everything too flashy reeks of scams, and people will promise you the world ONLY if you pay a certain amount of money. Yes, you indeed need to put in a small amount to open a trading account, but it doesn’t mean investing ten thousand right away. There is no shortcut in trading.
Everybody has a (trading) plan.
Over time, you will learn what your forex strategy is, but first, you will set up your trading plan with your broker, a course, or both. This will give you a perspective of what you want and what you have. These two points will provide you with a clearer picture of how to get it by being smart and patient.