Trading is the modern man’s hustle. It is one of the most common hobbies or side jobs in the 21st century, and usually one of the most well-paid ones as well. Well, you’re not really being paid, you’re just earning from your own smartly placed trades on the market.
Now your first question would be, “Why FX? Why not stocks?” and that’s a great question. Although most people go for stock trading as their first financial experience, it’s commonly believed that they end up on the FX market sooner or late. Why is this? Because the FX market is more profitable, safer, and easier to navigate.
Everybody needs currency, right? Meaning that there will always be some kind of demand for it, thus making the market a lot more stable than any else. It’s an ideal environment for a beginner trader, as well as a large one looking for the relative safety of their investments.
How to get started
The first thing that you need to do is find a good FX broker. Well, how do you do that?
There are several ways. You can just contact your local financial regulator and have them give you a list of licensed forex brokers in the area, or you could start Googling to find your answer. But regardless of how many brokers you find, it’s always a good idea to read some reviews.
For example, you find FXTM (a very popular broker). The company looks decent on the surface but there are some negative mentions online. The only question you have at that point should be “is FXTM legitimate?” or is it a scam?
After answering this question, you can start reviewing the broker’s features
Forex brokers always try to offer some kind of benefit to their users in order to either make them their new users or keep them as customers. These benefits are usually things like smaller commissions and bonuses.
Arguably the best deposit bonus or a no deposit bonus would come from a legitimate company as they’re much more likely capable of handling it financially.
The no deposit bonus is basically free trading money, while a deposit bonus is money added to your deposit.
The broker then requests that you trade a specific sum of funds by the end of a deadline they set so you become eligible for a withdrawal.
In the end, it’s usually a win-win situation.
Learn the software
Finally, it’s time to learn the software. Every broker has its preference, but you will most likely find an overwhelming majority using MT4 or MT5. According to 55brokers, this is because most software providers compete with each other and have the brokers sign a contract that prevents them from having any other software.
Luckily though, most of these options are similar in quality and don’t change the trading process too much.
Get a demo account
The best way you could possibly learn Forex trading is by getting a demo account. Imagine the demo account as something like a beginner’s bicycle. It is an exact replica of the official software such as MT4 or MT5, but the funds that you have there are completely virtual.
The broker usually fills up the account every week or month, depending on your preference, and you get the change to test out several strategies, see what each button does, find out where the tools are and etc.
It’s an amazing sandbox version of the real market that helps you orient yourself before committing your own hard-earned money.
But this does not mean that it doesn’t come with many disadvantages. You see, the funds that are on a demo account aren’t real, therefore when you lose them there is no emotional response or anything like that.
This could seriously change your attitude towards trading in two ways. It either makes you too indifferent towards your own funds when trading, or it does not emotionally prepare you for losses.
You see, when we’re trading on the real market, whenever we lose our trade, it’s gone, there’s no getting it back the next week unless we deposit more of our own money. Therefore, it’s best to just look at a Demo account as something to learn strategies and tools on the software, but then slowly start to apply these strategies on very small trades on a real account.
Choose your focus currency
One of the most common reasons why beginners usually fail on the FX market is due to their uncoordinated strategy on a single currency or currency pair. Most beginners just go for every currency pair they can get their hands on or any currency pair that seems to be performing well.
This is a terrible strategy simply because it increases the time and effort you spend on researching these particular currencies when you could have researched just one and pretty much guaranteed some kind of profit with it.
Trying every single currency pair is just too tiresome and tedious. It is a much better idea to focus your attention on one currency pair only and slowly diversify as you gain more and more experience.
Most experts say that the best currency pair to focus on is the EUR/USD because it’s not as terribly volatile as the others. But in several people’s cases, focusing on their native currency paired up with the USD could be the way to go. This is due to already existing knowledge and exclusive access to information about that particular asset.
Either way, no matter which currency pair you choose, it’s recommended that you stick with it for as long as possible before diversifying into something else.
The final tip would be to choose just one software where you will do all of your tradings then try to learn all of them at once. It will get very confusing and you may sometimes press the wrong button, leading to a terrible loss in multiple cases.
Overall, FX trading is just finding your preferred strategy and sticking to it as much as possible.