Tips for New Forex Traders
Forex has always been a magnet for investors and traders, who are
looking for an exciting business venture to invest in, giving them
the thrill, adventure and excitement, along with an idea of a
quick and easy way to make profits.
But, for those who are relatively new to the Forex trading world,
it is extremely important to know exactly what you are getting
into. When it comes to the matter of investing a huge amount of
your hard earned money into something, first time investors should
always make sure what they ought to expect out of it. What should
and should not be done. What steps should be taken to play safe
and what to do that keeps them at away from the frauds and scams.
First of all what needs to be learnt is, what is Forex and how
does it work? What need’s to be known next are a few important
trading tips, which will facilitate you during your transactions.
Foreign Exchange or Forex or FX is one of the biggest money market
in the world, and is a platform where currency is sold and bought
freely between buyers and sellers. Forex, unlike any other
financial markets, has no physical location or central exchange.
With over $1.5 trillion USD being traded daily, the foreign
exchange market has now become a market which is open to trading
by an average investor as much as it is open to a high investor.
Launched over three decades back, in the early seventies, Market
Forex introduced free exchange rates worldwide, according to
which, the price of the currencies was determined on the basis of
demand and supply only.
A number of reasons are responsible for making Forex a distinctive
financial market. To begin with, no external regulatory authority
is allowed to set or fix currency prices or rates in this market,
making Forex is market which cannot be controlled in any way.
Also, it is one of those few money markets that necessitate very
little trading education, training and experience.
In order to know the Forex market well, the new traders should
know how to start trading Forex. The few important things to be
kept in mind when beginning to trade Forex are as follows:
What needs to be done firstly is, to open a Forex account. This
can be done by filling up an application form, providing the
required essential credentials, like personal details, financial
particulars, and other details such as whether or not, a broker
will be allowed to mediate with any trade if it appears to get too
precarious and dicey.
Once your account has been created and recognized, you can begin
to flow cash in to it and start trading Forex.
New Forex traders are always advised to create two accounts while
trading, one of them being a real account, while the other being a
demo one. A real account will facilitate the trader to actually
trade in the market, with real money.
The demo account helps the new investor learn more about the
trading business. This way the new trader can practice his moves
of trading in the market, without the fear of losing all his money
in case he/ she goofs up or ends up making the wrong deal.
Also, before you start trading in the market, you should have a
closer look at all the top five foreign currencies and their
current rates to make sure, you are aware of the current rates and
are not missing anything.
The top five Forex currencies are: Pound/USD, Swiss franc/USD,
Euro/Yen, USD/Yen and Euro/USD.
Always keep a check on the market. With the time intervals on
hourly, daily and weekly schedules with all the currencies that
are in any way related to your trade.
Being a successful trader requires to come up with individual and
unique trading strategies. There is no “Golden Mantra” or “Trade
Secret”, which will work for the traders.
Every investor needs to come up with their own, personal and
distinctive trading approach when it comes to the market. There
are different ways by which, the traders approach the market.
Sometimes they may bank solely on industrial and technical
Some may like better to go in for a more elementary and basic
approach for trading, while others may make use of the past
records of the market, combined with both technical as well as
fundamental techniques for trading.
All these strategies help the traders in studying the patterns of
currency price trends and movements, making it easier for them to
foresee the course of the potential developments in the Forex
Currency prices in Forex market mostly move in trends. They have a
pattern, through which, certain movements can be studied. Some of
these movements which have been studied over several years mostly
help in discovering that pattern in the market trend. These trends
are what should be recognized and valued properly, to facilitate
the creation of an excellent trading strategy.
Any factors, financial or political, having some control over the
value or the price of a currency, have already been measured by
the market to be included as an important factor in creating a
When trading for the first time, it is always advisable to invest
by the trends. Trading with a trend can facilitate you by
advancing your chances with profit. Many new investors are
enthusiastic to start trading as soon as they can, eventually
ending up trading in any direction.
Trading by a trend or following a pattern and studying the market
can increase your odds of being favored by the market, making your
trading prospects high.