Forex, short for “foreign exchange” is the activity of converting or changing one currency into another, normally for financial gains. If you have been curious about this kind of trade and have heard of the way people are making millions from their homes, and you are really excited about learning about it and joining the wagon, this perhaps is the article for you, or is it? You see, forex trading isn’t a walk in the park – as you’ll soon find out. There’s more to it than meets the eye. In as much as the internet has made the trade more accessible to the masses, only those who master what it takes are the ones who’ll reap its benefits. Let’s look at what you should know before dedicating the next sleepless nights into this wonder trade.
Definitions! Definitions! Definitions!
You cannot manipulate what you don’t understand. You wouldn’t be able to read and interpret this article if you were not able to read and understand the English alphabet or understand the various words incorporated into this document. The same is true of forex trade as well as anything new you’ll find yourself undertaking. There are key terms in forex exchange that you should familiarize yourself with first of all so that when you doing some sniffing around in the forex trade world, you’ll be able to understand what fundamental analysis is or trading psychology. Yes, I just used some forex trade jargon that you may not understand – for now – but will be able to interpret after you familiarize yourself with the terms. Some key terms you should know and understand are:
- Technical analysis
- Fundamental analysis
- Money management
- Forex brokerage
- Trading psychology
- And more…
The first six terms on the list above are some of the key terms you should be aware of. Do some snooping around, research, and ensure that whenever you see this terms, you’ll be able to know what is being referred to, as well as implement what they mean.
Tread with Care
You must walk first before you can run. Did you know that over 70% of the people who try forex trading lose their investments? In love, you can rush in all you want, but in forex trading, only fools rush in. if you really want to live to see the vision you had become a reality, then it will be wise of you not to rush, make haste, or do anything foolish – like being impatient. Forex for beginners requires a lot of care.
The first phase of your trading ought to be about maintaining your capital; don’t be concerned about growing it yet. Your main goal in this phase should be reducing risk. A good approach to realize this is employing a long-term trading method. This is actually the trick most professionals use to realize their objectives. They normally employ long-term strategies that last for weeks, months, or years. There are no “get rich quick” schemes in forex, and it is not a lottery either. Think of it more as an investment, because at the end of the day, that’s what it really is.
Ultimately, before you even invest a single penny in forex trading, first of all, learn about the trade. Study it thoroughly. Even making use of the simulated environments provided by some forex trading applications to at least get a feel of what is going on and familiarize yourself with the patterns, terms, and charts that you should be able to observe, read, and interpret. Be prepared.
It is customary that where money is involved, particularly huge sums of it, strict legal bindings and regulations must also be present. This is not something that you assume but something you must be certain about. Imagine loosing just $1000 dollars in thin air. It’s not a pleasant thought, is it? To make sure that you are working with responsible people and companies, you have to be certain that is the case.
- Effective customer inquiry and complaint process – this ascertains that any issue filed by a trader that cannot be handled in a couple of hours is instantly transferred to the compliance department or customer support desk.
- Segregation of client funds – this sees that your money is only used for your trading and nothing else; therefore, ascertaining that it’s always available for withdrawal
- Financial services compensation scheme – indicates the funds you’ll be compensated in case the bank or your broker go bankrupt
There’s more for you to learn but the few points highlighted above should give a good foundation to build on. If you feel this is the article for, very well, go for it. Happy trading.