These days, everyone is looking for a way to make a little extra money; Forex trading offers an opportunity to do that (with the risk of some losses, of course). If you’re interested in beginning your trading journey, this simple guide will take you through the steps one by one.
Choosing Your Broker
One of the first things you will need to do is choose a reputable forex broker to work with. Start by looking into your options and do some research to see what you can find on them. If you already have a good base knowledge, a wide variety of trading options will be imperative. For pure beginners, however, it is more important to find a user-friendly, secure platform that has strong customer support in place. It’s also a good idea to look for a broker that offers low deposit requirements, as well as quick and easy withdrawals.
Opening a Trading Account
Opening a trading account is generally a straightforward process. You will usually need to provide an email address and phone number, as well as some other details. You will also need to provide details for an account you can use to pay money into your account (and withdraw any profits).
One good thing to consider is using a demo account. Demo accounts offer you the chance to make practice trades without risking your capital. Not all trading platforms offer this feature, but it’s well worth trying out if the one you choose does.
Funding Your Account
Before you can make a trade, you will need to add funds to your account. Different platforms have different minimum deposit requirements. This is something else you should keep in mind when choosing a forex broker.
Making Your First Trade
You should take some time to learn about the basic terminology before starting. For example, if you decide to trade GBP/USD (that’s British Pounds and US Dollars), the exchange rate tells you how much you need to spend in one currency to buy the other. In this example, GBP is the base currency and USD is the quote currency.
The bid price is the price at which a broker will buy quote currency and sell base currency, while the ask or offer price is willing to buy base currency in exchange for quote currency. The spread is the difference between the bid and asking prices. To make a successful trade, you should consider the economic strength of the countries that use each currency and calculate potential profits.
With a funded account, making your first trade is as simple as placing an order. The hardest parts of a successful trade are doing the research and knowing the right time to make a move. Good intel is key and experience is important, but remember that even the best traders can’t predict the market infallibly. And you can even use Forex apps to make trading easier.