Hello everyone! Today is my last post in my mini-series on trading forex. Part 1 focused on spread betting and today I’ll discuss some steps to take to gain experience before starting to trade forex.
This series of posts are intended to introduce a couple more complicated investing (or “betting”) strategies that are out there. These concepts are relatively new to me and while I don’t necessarily endorse them or fully understand all the risks myself, I have always been of the mindset of learning new things to expand my horizons. Take the post for what it is worth, but hopefully you learn something new today!
After this short series I’ll resume my normal posting agenda on Monday 8/14 with an update on my investment philosophy!
What Experience Do You Need to Start Trading Forex?
The most important thing you need before you start trading Forex, is practice and education. Before you even consider trading Forex, you need to learn the basics. Most brokerage firms offer online educational resources of different types.
You could read articles, watch videos, follow tutorials and more. In addition, there are many online resources that are not connected with specific brokerages. There are numerous websites to teach you about Forex trading through articles and videos.
Of course, there is always the more traditional route of visiting your local library and reading books about Forex trading. Since so much information is available, it is easy to get overwhelmed. Take your time. Do not be in such a hurry to begin to trade currency that you neglect to learn how the market works and understand what you have at stake.
Once you have learned the basics of Forex trading, you will want to consider choosing a brokerage firm. There is unfortunately a large amount of dishonesty in the Forex Brokerage business. Make sure the firm you are choosing has actual testimonials, proven success, clear regulation and methods in place to secure your funds.
It is recommended to start with a small minimum account so that you can determine if the brokerage you choose meets your needs. At the very least, make sure your brokerage allows you a free demo trading account.
Learning to use the trading platform that is offered by your broker is the next step. Most brokers offer the MetaTrader 4 platform and some offer other choices as well. Your Forex trading can only go smoothly if you can use the platform easily and make your trades seamlessly. Whether you intend to do most of your trading on your desktop, phone or tablet will determine which version of the platform you will need to download and begin to use.
Type of Trading
Knowing the type of trading you hope to engage in is key to deciding how to proceed. Day traders or short-term traders will need to utilize different charts and learn different methods than those traders who intend to hold their positions for longer amounts of time. Carry trading requires more patience, more funds and less daily intervention than swing trading and it is important to focus your attention on the type of trading that will work for you.
The demo Forex trading account is what will give you the experience you need to start trading Forex. When you have learned the basics, and are ready to start to form a trading strategy you will need to try our many different approaches to Forex trading in order to find the one that works best for you. Personality, time to invest and financial philosophy are just some of the factors that go into figuring out the best Forex trading plan for you. You can even mimic an expert trader to test out his or her strategy. The experience you gain from demo trading is invaluable and will be the key to becoming a successful Forex trader.
As I mentioned earlier, I hope this mini-series on forex trading was insightful. Is forex trading for you? Only you can decide. Personally, I like to keep it simple. Complex investing (or “betting”) strategies don’t suit me well. Knowing my goals and having a plan in place to reach financial independence and early retirement have persuaded me that index investing is best.
Stay tuned for my post on Monday 8/14 for an update on how my investment philosophy has evolved.
Thanks for taking a look!
The Green Swan