Many people believe that trading on the foreign exchange market is just for people with degrees in financing and economics.
The truth however lies in the fact that with a little bit of investigative inquiry and free time, one can learn how to play the market like Paganini plays his violin.
Naturally, there is a catch; an intricate system which correlates to market analysis and currency pairing.
For beginners, it is good to use an automated trading platform – which just like the name suggests will analyze and calculate probabilities and project them accordingly or choose one of the best Forex brokers.
Beware however that not all.
Pair Trading
Like I mentioned above, the primary method for making money on the Forex market, is by pairing different currencies together and profiting form their ups and downs.
For best effect, it is recommendable to trade during the peak volume hours, just to guarantee maximum liquidity.
Assuming that you will be taking Forex trading as a career, and not as a hobby, the best time to do trading is either in the beginning or at the end of the day. This is when the market is most active, and would facilitate the selling of positions the best.
The best currency to start trading with is undoubtedly the US dollar. It has been so ever since 60% of the world’s reserve currency is made up of $. US dollars are stable and they practically go well with anything – the Japanese Yen, Euro, the British pound etc.
Only experienced traders are bold enough to trade in foreign pairs, although even they would prefer trading in dollars.
For people who have lesser time to trade currency, experts advise that beginners start off with the USD/EU currency pair and progress their knowledge further only after studying the principles of the dollar/euro relation.
Because this particular pair is deemed as being the ‘most stable’, and it is the most traded pair altogether, there is a lot of information available on the Internet – allowing novice traders to understand the concept behind the art.
Install and Adjust Your Automated Trading System
When a trader first enters the world of Forex, he is faced with one of two choices. He can either trade on his own, or use an automated trading software.
Of course for the purpose of this presentation we are going to learn a little bit about automated trading and its advantages and disadvantages respectively.
Programs such as these ones can make cold blooded; suggest winning maneuvers, which will (at least theoretically) prove a much better success rate, at least in beginner; monitor currency fluctuations in real time; place market orders, acknowledge profitable spreads and order trades automatically.
The “set and forget” feature than most automated trading systems posses in their inventory of features, makes decisions instead of the trader. A beginner can learn quite a lot from a program such as this, and most importantly – understand the logic behind said decisions.
Motivation and Discipline Are The Keys to Success
If you don’t feel like trusting a machine with all your investment money, you can do the whole thing by yourself – no computers involved.
Of course one needs iron discipline in order to stop and cash in the spread before things turn sour.
Forex trading is like gambling; once you get a taste of profits you will play until you are out of chips.
To avoid such dreadful scenarios from happening, beginners are advised to take their money as soon as they make it. Waiting for a wide spread might play a bad trick on you, considering that tendencies and the flow of currency can change at any moment.
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Image courtesy of Stuart Miles at FreeDigitalPhotos.net
Forex trading can be opted as a career and one can earn handsome in the forex field with his experience. Being a forex broker or forex analyst many people are satisfied with their decision of starting career in forex. Anyone can start his/her career in forex trading. Many demo accounts are available these days that helps people in understanding the basics of trading and how one can trade, earn or loose.
I have never traded Forex but it is of interest to me to learn. I just don’t know where to begin. Thanks!