To start with trading or investing your money in forex trading, it is always suggested to learn and gain information about what a forex is, how it works, and what the crucial points you need to be aware of are. But, there haven’t been any defined steps for where to start from and what should be the next step, if you have gained theoretical knowledge on it.
Worried? Well, you don’t need to be. In this blog we have covered your solution, ranging from gaining theoretical knowledge to practicing online and executing it over the platform to begin your journey. So, let’s start our learning.
Start with theory
To start with Forex trading you must have a clear basics which starts with acquiring theoretical knowledge. You can refer to educational materials, check for a few courses available online or offline, and go for a few detailed videos that cover the explanation in simple and defined steps. You can attend various webinars and seminars to expose yourself to the world of traders and gain real learning.
Once you have gained and learned the theory, the next step is learning from the market. This step involves learning from the traders who are effectively trading around the market. You can refer to their case studies, and learn from their tips and techniques, you can also check for their client testimonials, feedback, and achievements they made till now. This will help you to gain an idea about what a trader looks like and what personality or traits you should incorporate into yourself to become a successful trader.
However, it is important to understand that every trading is different and the same goes for every trader. You can learn from them, their experiences, and their shared tips, but you have to be your own player. Your strategy should be your strategy, and your tips and tricks should be your own implemented and tested, then only you can achieve your goal of becoming a successful trader.
Delve deeper by exploring terms
So, once you have gathered all the knowledge, time to take the first step in the world of trading. However, as analysis is the prior part of trading, your step begins with this.
Learn about Currency pairs
The first analysis starts with choosing the best currency pair for your bid. As you know, trading is all about the exchange of currencies, so gather information on what kind of exchange will benefit your trade. For example: if 1 USD = 10 INR, then your 1 USD is worth 10 INR, which will be a profitable trade.
However, there are four major pairs on which trades are usually done such as USD/INR, EUR/USD, GBP/USD, and USD/JPY.
Along with this, you need to also have a strong knowledge of the forex pip. Pip is the smallest change in the price that occurred in the trading. This helps you to know at the end that you are at a profit or loss. The second term is the lot, a lot refers to the value of the currency you are trading off. There are typically three framed lots: a micro lot with a worth of $1000, a mini lot with a worth of $10,000, and a standard lot of $100,000.
Once you learn this, get towards the leverage part. This term allows you to increase your investment capabilities if you’re fond of maximizing profit along with risk-bearing capabilities.
Learn about the software
Once you have gained a thorough knowledge of the currency, the second step is to learn the software. MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are two popular trading platforms that allow you to learn and execute trades.
Get this software to explore the features, of your interface with the global market, learn where to navigate and place orders, and explore settings, and features to make yourself comfortable to start with the trading.
Practice with a demo account
As a beginner, it is always suggested to start with a thorough practice before investing your real money. A demo account helps you to trade but with virtual money. This helps understand market movements, test and set your strategies, experience real market conditions, and place orders.
Practicing with a demo account not only strengthens your analysis and market understanding but also boosts your confidence, and makes you familiar with different tools and techniques, which will be effective in strategizing with real money.
Find a legit broker
The next step is to find an authorized broker. Research and select a reliable broker, check their certifications such as FCA, SEC, or ASIC, and compare their spreads, commissions, leverage options, and years of experience to figure out the best brokerage for your trading.
Along with reliability, do also check for customer support quality. Check for whether they attend calls or just emails. Checking for this will help to avoid any future uncertainties.
Learn Strategies and be updated with news
Once you have got a broker, the next step is self-improvement. Delve deeper into technical analysis as well as social and economic analysis. Study chart patterns, and indicators, to learn the price action strategies.
Analyze economic indicators, news events, and monetary policies and what impacts will they have on the market, will there be a positive response or a negative? Will it lead to a current change or also affect future stabilities? Keeping yourself updated with every change will help you to gain valuable insight into the strategy.
Start your bid
Once you feel that you are confident and are ready to start real trading, invest your money and start with real money trading.
However, do ensure that your investment in your bid should be lower to decrease the chances of high risk. Always go for a short run to test every phase, this will help you to learn slowly but effectively.
Keep a track
Once you start with real money trading, start keeping a track record of the analysis. Keep a record of your trades, strategies used, outcomes, and lessons learned.
Review your trading performance weekly and make necessary adjustments to your trading strategies and plan. This will help you to strengthen your weak areas, making you better at trading.
Tips to execute trading positions
Till now we have learned how to start, where to begin, and how to begin with, now we will learn the execution part. Once you have practiced and set to execute the real trading, kindly refer to these pointers for a continuous trading process.
- Once you have downloaded and on the interface, check for your trading setup and outline your strategy.
- Analyse and strategize whether budding or selling will be advantageous for your trade.
- Open the menu to begin with your order and kindly click on the button on the chart.
- Now, select the order type i.e. buy or sell, and facilitate the setup.
- Select the market position as per your strategy.
- If you are facing a loss, select stop loss from the menu or set a different trading position to stop the upcoming losses.
- If you are gaining profit, you can set a profit order or set up to stop or don’t want to take risks for the unplanned target.
- Monitor your trading positions and maintain a journal.
- Check for a more refined strategy to gain or maximize the profit.
- Re-plan and execute the same.
Conclusion
With this, we have come to the end of the guide and I hope now you have a clear idea that you need to start from scratch, and go line-by-line learning all steps to practicing it in a demo before you head to the real trading. Keep connected for more information!
Frequently asked questions (FAQs)
Yes, you can learn forex trading on your own, and Crypto Forex World free online courses provide a valuable starting point.
Yes you can say hard but you can easily learn the forex market with demo account.
It might take anywhere from five to six months to two years to develop a solid understanding and potentially become profitable in forex. But this is just an estimate.
