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How to Learn Forex in Seven Simple Steps

By: Muneeb Ahmed

2. Learn about the currencies and the market. So, now that you’re prepared to lose all your money, you’ve got to learn about the market you’ll lose it in (just kidding!). Your next step in learning to trade in the Forex market is to learn and study the different currencies and how they interact. Learn the seven major currencies, and as many of the little ones as you’ll be interested in trading. Spend some time with Forex tutorials (there are approximately two bazillion of them online) to learn the basics of what Forex is about.

And remember: just because it’s simple to trade (and it is) doesn’t mean that the market itself is simple. Because it’s not. A lot goes into determining what goes up and what comes down.

3. Learn to speak the lingo. There’s a whole language behind Forex trading. And while you already have a good idea of what profit and loss mean (if you don’t, Forex trading is not for you), there are plenty of words and phrases that may confound you if you don’t know them. Learn what a pip is (this is the backbone of making money with Forex), along with leverage, lot, margin call, base currency, quote or pip currency, spread, and more than we have room to go into here.

4. Learn the strategies. There are lots of strategies out there for successful trading-- more than you could count. Learn what goes into a successful trade, and the basic (and in-depth) strategies that more successful traders follow.

5. Get a high speed Internet connection. The Forex market is a little like Superman-- it’s incredibly resilient and moves as fast as a speeding bullet. So you’ve got to have a super-quick internet connection if you expect to even practice trading. Sorry, stone-age computer users dial up won’t work for Forex.

6. Open up a demo account. A practice demo account is like training wheels for your training wheels, and is probably the most important tool you have in learning Forex. And while the experience of practice trading with Monopoly currency is not exactly the same as trading with real money (emotion plays a big part in trades), it is the closest you’ll get without putting anything at risk. A demo account both allows you to learn your chosen trading platform, and test out different strategies to see how they work for you.

7. Start off with a mini or a micro account. Now it’s time to take that extra set of training wheels off, and start trading real money on the market. But you don’t want to put a lot at risk, because if you fall off this particular bicycle, you don’t get a scraped knee you get an empty bank account. Most Forex brokers offer mini accounts or, even smaller, micro accounts for those that want to start off trading with just a few hundred bucks. Which is what you want to do. Mini and micro accounts are the best way to test your trading skills and gain experience with real money on the real market before you ride solo and put more at risk.

Article Source: Main Articles

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