Forex trading is no cakewalk, but you can reach a level when you no longer agonise over every move and will trade with confidence instead. If you dedicate enough time to studying the market, learning trading techniques and sharpening your instincts, you may even start to find forex trading fun and exciting.
Allow us to point you in the right direction with this article. What is the best way to learn forex trading? Here are our thoughts:
1. Read and research.
If your motivation to do forex trading is based on the stories of traders like George Soros who reportedly earned $1 billion in one day, that’s perfectly understandable. But you must acknowledge that the big earners who went down in trading history succeeded because they studied their currencies of interest and acted strategically. Even those who earned quickly still went through a learning curve before they started earning from forex trading.
There’s no going around it: research is a prerequisite to trading. There are plenty of free resources available online, such as blogs, forums, industry magazines and explainer videos (the ones produced for amateurs are especially helpful when studying complex trading techniques for the first time).
Here are a few trading techniques you should know about:
- Day Trading
- Swing Trading
- Trend Trading
- Spread Betting
- Position Trading
Fair Forex also have a dedicated telegram chatroom wherein you can talk to fellow traders. These become available when you sign up for an account with Fair Forex.
2. Find a reliable and trustworthy forex broker.
To trade in forex, you should be registered with a licensed broker. Your broker will provide the platform and tools, as well as currency pairs with which you can trade.
Many first-time traders will look for brokers that offer the cheapest account types with as many user privileges as possible. Although affordability is indeed convenient, it is also a smart idea to look at a broker’s trust rating, reputation, trading platform reviews and available currency pairs.
Bear in mind that some brokers only offer major currency pairs (no exotic pairs) and others don’t offer all major pairs. You might also lean towards specific currency pairs (pairs that are stable and whose movements you find easy to predict) the more you study and research forex trading. You’ll want to make sure that your broker offers those pairs you want to trade with.
Finally, you’ll want a broker that’s trustworthy and reliable. When you’re making major moves in speculation or leveraged trading in the future, you’ll need a broker that can move the funds you need right when you need them.
3. Create a demo account and practice trading.
When you’ve gained substantial knowledge and have learned as much as you can about specific trading strategies, your next step should be to try them out yourself on a legitimate trading platform.
We highly recommend creating a dummy account for forex trading. If you register with Fair Forex, you can create a “demo account” with which you can finally have hands-on experience in selecting pairs, choosing indicators, reading the data, and identifying and predicting market movements (e.g., uptrends, downtrends, peaks, and troughs).
The advantage of having a demo account is you can get your feet wet without buying or selling currency pairs just yet. You can try a test trade or spread bet, decide on stop-loss orders and set up indicators using the tools available in the Fair Forex trading platform. Demo accounts are excellent for test runs in forex trading. With frequent practice and study, you can develop keen trading instincts and predict trends with accuracy.
4. Start trading.
You’ve studied trading techniques, opened an account, practised with a demo account, and now know the ropes of forex trading. You’re ready to make your first official trades.
Start small if you’re nervous, although if you practiced long enough with your demo account, you might be more confident to make bolder moves and take bigger risks. Expect mistakes on your first rodeo, but make sure you have your stop-loss orders properly set up so that your bank account won’t suffer on your first day of trading.
Like with any form of investment, you need to invest resources in forex trading; but more than that, you need to invest time and effort in studying the market and learning how to trade. There are no shortcuts, and if you start with zero background or knowledge, you may have to work harder than the rest.
Your efforts won’t go to waste and you could reap payoffs in the form of profits. Take the first steps into forex trading and choose a broker that can help you achieve your potential as a trader.
Browse the trading accounts you can open at Fair Forex. You can look forward to rapid executions – under 50ms – thanks to our true ECN (electronic communication network). Trading with us gives you access to a diverse and deep liquidity pool consisting of hedge funds, high-frequency traders and banks.
Your first foray into forex trading can be an exciting, positive, and fruitful experience with Fair Forex. Contact us to get started.