Are you thinking of having a go at currency trading and looking for some forex tips?
There is no doubt that there is money to be made from forex currency trading, but like most things in life it does take some work. We’ll talk about automated forex robots in a while, but to begin with, you need a thorough grounding in how the foreign currency markets actually work.
Here are some basic forex currency trading tips to help you on your way in the world of the currency markets.
Of the forex currency trading tips you’ll find, I would consider the most important of all forex tips to be to learn as much as possible about how the markets work before you even think about starting to trade with your own cash.
Forex trading is all about speculating on which way two currencies will change in value in relation to each other. Currencies are traded in pairs. If you can consistently predict how two currencies (a currency pair) will move in relation to each other over a given timeframe, you will make a lot of money from currency trading.
Before you start trading there are lots of terms you need to be aware of and understand. I would recommend you read the following free online forex books to start your education. Both books cover all the basic terminology and can be downloaded instantly.
My next forex tip would be to read as much as you can about the art of “technical analysis”. Technical analysis is basically the science of predicting currency movements using trend analysis and historical data to map out chart predictions. The more you understand about technical analysis and forex charts, the better armed you will be to make money from the forex markets.
There is no substitute for knowledge, so learn technical analysis, even if you intend on using automated tools, having the knowledge of charting trends will help you to get the most from any tools you buy in the future.
Forex trading tips number three would be to choose your currency trading platform and forex broker carefully. Spend time looking at the benefits offered by each before you sign up. A good broker will have been established for a number of years and be able to provide plenty of customer testimonials. They will also provide lots of training and a 24/7 help line manned by real people.
A good forex broker will also offer a trading platform with a “demo account” for you to use. Using a demo account is another of my most important forex tips. Do not risk a penny of your own money until you have trialled your trading strategy on a demo account. Good brokers will provide one. A demo account basically allows you to simulate your trades without the need to deposit any money! So learn as much as you can about technical analysis and then apply what you know via a demo account to see how you fair.
Another forex tip for beginners is to start with a mini trading account. Mini or micro trading accounts only require small deposits and allow you to trade in small amounts also. I would consider it essential that any new trader follow the steps of a demo account first, then a mini account for actual trading before progressing to a regular account.