A Complete Guide to Forex Trading for Beginners

A Complete Guide to Forex Trading for Beginners

Forex trading is one of the few elite trading avenues that are popular globally. In fact, it is the biggest financial markets of the world where trades worth trillions of dollars are carried out every day. Unlike other types of trading, Forex trading is strictly regulated by international financial agencies. This ensures reliability and risk mitigation for traders.

Previously, the forex markets were not regulated; however, with the rampant increase in the number of traders who are doing trading to make money or for steady income, there is stringent regulation in most countries. In the US, Forex brokers are regulated by the NFA (National Futures Association) or CFTC (Commodity Futures Trading Commission (CFTC). Currently, the major Forex trading centers are in London, Frankfurt, Tokyo, Singapore, New York and Hong Kong.

To get started with Forex trading, you will need a reliable broker. Tradefw.com is a leading forex broker trusted by countless novice and experienced traders. It offers the best forex deals and trading opportunities to new traders. But before you jump the gun, let us brief you on the essential details about various aspects of Forex market, forex trading, and how it can help you lessen your financial worries.

What is Forex market?

Forex stands for Foreign Exchange. Forex market is the most liquid stock and forex trading market in the world. It involves buying, selling, exchange, and speculation on currencies. This market has two levels i.e. the interbank market and the over-the-counter (OTC) market. In the former, large banks do currency trading for hedging, adjusting balance sheets, and for their clients. On the other hand, the OTC market is the one where people trade forex via online trading platforms and brokers. Thus, it offers traders the chance to make rapid trades and massive profits through prudent trading decisions.

Forex trading is a type of speculation where the trader needs to ascertain the movement in the exchange rate of international currency pairs like EUR/USD (Euro- US dollar) and AUD/USD (Australian dollar- US dollar). Main currencies that are traded are US, Canadian and Australian Dollars, Euro, British Pound, Swiss Franc and Japanese Yen.

Forex Market Participants

• Governments and Central banks: Responsible for foreign reserve volumes and making and changing monetary policies keeping the economy in mind.
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• Banks and Financial Institutions: People depend on banks for foreign exchange for travelling and other things. Banks also do forex transactions with each other.
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• Hedgers: An example of hedgers would be people who import and export commodities and need to do transactions as per foreign exchange rate.
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• Speculators: They are those people who speculate about currency movement to make money. They are also known as forex traders.

How do forex prices move?

Various factors that influence the exchange rate of foreign currencies are government intervention, the performance of an economy, its economic policies, inflation in exchange rates based on supply & demand, political events, interest rates, country’s imports vs export, amount of debt a government has taken, and opinion of speculators. It is important to understand all these factors to know how forex market works. An understanding of these helps traders to place profitable trades or take advantage of some of the best forex deals.

How can I start forex trading?

Traditionally, forex trading was done via telephones. However, the rise of the Internet has dynamized the entire market for the betterment. Now, trading can be done 24 hours, 6 days of the week using an online trading platform. Find out about the best trading platform for beginners by reading forex trading reviews by experts.

Once you choose a trading platform, you need to sign-up with them and open a demo account. Once you are confident of trading real-time, you can fund your account and start trading. If you do not have any experience with financial markets, then you should learn it online. You will find many online tutorials on forex trading for beginners that tell you how to place trades and understand market patterns to earn profits.

Forex Trading Tips for Beginners

Before you rely on a broker like tradefw.com, which is among the best regulated forex brokers, here are some forex trading tips to help you find the best way to trade forex online:

• • The first thing to understand is that in Forex trading, you will be making financial trades. So, you will have to risk a certain amount of money to gain a great degree of profits.
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• • Do not look to make profits right off the bat. Learn to how to do forex trading step-by-step.
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• • Ascertain the amount you are willing to invest, the amount you can pay as broker fees and also your trading goals.
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• • Start with a small amount and as you succeed, you can increase your account size.
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• • Forex trading is NOT simple. Start by focusing on a single currency pair. Go slow and steady.
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• • Don’t place trades without understanding. Ignorance is not bliss when it comes to forex trading.
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• • Don’t trade based on assumptions, intuition, guesswork or rumors.
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• • Reading charts and understanding the patterns will help you make the right trading decisions.
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• • Go with the market trends, at least in the beginning.
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• • Forex is very volatile and the best traders are those who know how to take advantage of the changing trends.
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• • Be wise. Control your emotions. Don’t get over confident. Take logical decisions.
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• • Have the heart to take risks and be prepared for losses. However, focus on minimizing losses and maximizing profits.
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• • Learn from your failures and keep trying. Patience is the key. No one becomes an expert trader overnight.

If you do Forex trading after equipping yourself with lessons like How to trade forex, forex trading tips and strategies, do’ s and don’ts of best forex deals and a decent initial investment, you surely can make money like various skilled currency traders out there. However, for a new trader the road to becoming a successful forex day trader can be difficult initially; but if you are patient, disciplined and have realistic goals, there is no stopping you. Sign up with Forexfw.com to make your forex trading account today!