How Hard is Forex Trading?

How Hard is Forex Trading?

  • Posted on 1919-1111-2020
  • by Gareth McCauley

Contrary to popular belief, forex trading is not rocket science. As with any market, it requires risk, practice, and a certain level of knowledge to be successful. And once you’ve learned the ropes; forex can be one of the most lucrative markets to pursue.

To help you get started, Fair Forex lists down everything you need to know before trading currency pairs.

 

Why Forex?

Forex can be an attractive market, even for newcomers with minimal experience. Traders can get started with as little as $100 and the market is available 24 hours except on weekends. This means traders can enter the market at any time, even when centralised markets are closed.

Forex trading is often controlled by simplified tax regulations. Traders only need to pay a simple trading fee based on the spread between currency bid and ask prices. They also have full control over the risks they wish to pursue and have the ability to establish in advance trade exit and stop-loss rates before entering a trade.

 

How to Get Started

A successful forex trader knows that it takes a lot of time, education, and practice to achieve success. Aspiring traders are required to:

  • Create a trading account at a forex broker
  • Install a trading platform on their computer or mobile device
  • Deposit at least £100 in their account to get started.

Once the account is ready, traders may now access price movements in real time, enter orders, and explore trading strategies. Currencies are traded in pairs which means every time you purchase a currency, you also put another in the market.

 

Select a Trading Style

Traders can choose from a variety of styles, depending on their current need:

  • Scalping – involves trading currencies and only holding them open for seconds or minutes at most to make a profit. The goal is to take advantage of small price movements throughout the day to make several quick trades.
  • Day trading – involves entering and exiting trades on the same day to eliminate the risk of substantial overnight moves. Just like scalping, it relies on frequent small gains to make a profit.
  • Swing trading – involves holding positions for a couple of days up to several weeks to take advantage of an anticipated price move. Because positions are held long-term, traders are not required to constantly monitor the charts. This makes it an ideal choice for people with full-time jobs who are looking to trade during their leisure time.
  • Position trading – involves trades that may span from a few weeks to a few years in the hopes that it will appreciate in value.

 

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Create a Demo Account

Brokers would often advise traders to start with a demo trading account before diving into the market.

On the one hand, demo accounts allow upstarts to get a sense of how the market works. They get to test trading software without having to use actual funds. Once they’re familiar with the processes, they can then proceed to a real trading account. On the other, demo accounts enable experienced veterans to fine-tune their skills and become better traders.

Make demos more realistic by accommodating slippage and keeping the simulated capital close to the actual figure you’re planning to trade. Exclude improbable orders or those unlikely to have been filled in the actual market and add external stimulus to replicate the sense of loss and profit.

 

Keep a Close Eye on the Market

Trading is no guesswork. Ideally, you should possess a fundamental understanding of the national policies and political climate of your chosen issuing country. Political and financial data will aid you in forecasting market movements and discovering potential opportunities that wouldn’t have been obvious at first.

 

Join the World’s Fairest Broker

To thrive in forex trading, you need the right tools, knowledge, and the support of a broker who works for you, and not against you.

The broker you choose will massively influence the success of your trading venture. At Fair Forex, we offer lighting fast execution, deep liquidity, and absolutely no manipulation or restriction. Our commissions and spreads are some of the industry’s lowest. We offer free deposits into client segregated accounts to ensure safety of funds and peace of mind.

Contact us at 1-844-600-FAIR to schedule a consultation.