Forex trading refers to the buying and selling of currencies over the global market in a motive to make profit. It is one of the biggest sources of investment to gain high profitability.
However, if you’re interested or looking for ways to raise money on a foreign market or say through forex trading you must be aware of the risk associated. As the foreign market is full of fluctuations there are chances that it might lead you to incur loss even depicting your initial value too. But, if done in the right way with thorough research, it can lead you to gain a healthier profit, say twice or thrice your value as the market responds!
With this, we can conclude that it all depends on your analysis of stats and charts, market study, and economic trends. So, if you’re ready to make money from forex trading, you must follow these steps to play safe on the trading.
How to Make Money with Forex Trading?
Here how to get money from forex trading step by step guide; i hope after read this whole article you can get more confident in forex market:
Start with the basics guide
Before you head to any trader or broker for your forex trading process you must learn the basic terms related to it such as the amount you will need to invest, how much you can bid on, and specifically the currency you will bid on. If you want to know how do you start forex trading you can read this. To give you a brief, the four major terms which you will be dealing with are:
- Currency pairs – This requires you to choose a currency pair for yourself, in which you will be buying and selling to trade.
- Pips – It is the smallest price change on the currency pairs as per the market results. For example, if your pair has an increment let’s say moved from 1.001 to 1.002, then it has changed to 1 pip. Generally, the pip is the fourth decimal place or say 1/1000th.
- Leverage – The term itself defines it as it allows you to increase your capacity by borrowing the amount. Let’s say you have $1,000 in your trading account and you want to trade with a with a leverage of 50:1 i.e. (50 * $1,000). Now, if EUR/USD moves 100 pips in your favor, you can make a profit of $500, whereas if it moves against you by 100 pips, you would lose $500, which is exactly half of your initial investment. So, leverage does offer you profit but with loss risks too.
- Lot sizes – The forex trade works on the lots. Basically, there are three lots a standard lot – 100,000 units, a mini lot – 10,000 units, and a micro lot – 1,000 units.
Keep yourself updated in forex market
So, as we discussed earlier, the foreign market is highly affected by market trends, be it politics, news, economic development, natural occurrences, or any other affecting factors. You need to be very careful of every single factor that has an influence over the market rates. Now, how could you do that? Well, just follow this:
Gain Knowledge
Look for the courses, learn and gain knowledge about the factors, how they affect market rates, how their changing trends can change the trade value, what are the signs of positive change, and which kind of movement can lead to loss occurrence. You can refer to the various videos, or enroll yourself under the online or offline courses.
Read books, articles, stories of traders, and their case studies, this will definitely help you to define trading for yourself in the simplest and safest way.
Get updated with the regular news
Price inflation and deflation occur every day, so along with the deep study, you must also have a keen and strong research over the news to study the changing trends of the market.
Find an authorized forex broker
If you are starting it for the first time and don’t want to minimize your risk you can hire a forex broker for yourself. Kindly note that a forex broker should be an authorized broker so that you do not have to bear any legal penalties in the future.
However, you can find brokers from various reliable trading platforms such as Meta Trader 4 or 5. Search for them, jot a few options for you, check for their fees, and compare their spreads and commission, this way you can hire a broker in the best way.
- Start with a demo account – Now, if you want to do it yourself, the best way to get started is with the demo account. A demo account helps you to learn market nature of the market, test and develop strategies, and check for the charts, their fluctuation rate, and your analysis results, even without risking your money.
- Go for the real investment – Once you are ready with all the knowledge, and market nature study, you can start with the real investment. Kindly start with low capital and plan accordingly in which to bid and how much to trade for. Generally, 1-2% of the capital investment is used for trading over per pair.
- Analyze and check for your updates – As the market goes, check for the charts, indicators, the market response, and maintain a journal to report your changing value, this will help you to decide your value for the bigger the investment.
- Do always look for the better side, like if you have incurred a loss, what went wrong, if you gained profit, which factors initiated the gain percent. This analysis will help you to define your call in an easy and smart way.
Conclusion
Forex trading is a strong investment weapon, but only if it is done with the right approach. From learning basics to getting updated with news, practicing it with demos to analyzing over real platforms, every step requires thorough research, a lot of knowledge, and, yes, learning from every step. Good luck!
