For those unfamiliar with the term, FOREX (FOReign EXchange market), refers to an international exchange
market where currencies are bought and sold.
In the past, Forex Trading was only accessible to large corporations and trades consisted of moving millions
of dollars at a time. In recent years, however, currency trading has become available to common people like
you and me.
These days it takes surprisingly little capital to get started trading in the Forex market, but that doesn't mean
you should jump in unprepared. A lot of would-be Forex traders are blinded by the lure of fast profits and jump in
without a solid understanding of how the markets work.
If you're new to Forex trading, the best way to get started and learn is through picking up some first-hand experience
which you gain from a Forex Demo Account. As you might guess from the name, a forex demo account affords you
the unique and risk-free opportunity of trading under real market conditions without investing any real money.
Here are some tips that you should keep in mind when you're preparing to dive into the Forex world:
- Learn the terminology: Pips and spreads, majors and crosses - are you sure you really know what Forex
terms like these mean?
- Understand how the markets work and what factors affect them.
- Get clear on your Trading Strategy: Some days Forex trading may feel about as predictable as throwing
darts at a wall, but that doesn't mean you don't need to follow a solid, proven strategy. Many people lose money
because they do Forex trading like they do gambling. There are dozens of strategies used by professional traders,
so do your search and choose one that suits your trading style best.
- Know how to Manage your Risks: Unless you don't mind losing all your investment capital - not to mention
wasting your valuable time "playing around" in the markets - you'd better know all you can about how to manage your
risks. Learn about things like limit orders and stop loss orders and other methods you can use to keep
your risk of loss down.
- Find a Mentor: This is one of the greatest secrets of Forex trading: Don't go it alone!
No amount of books or training manuals will ever be able to teach you as much as working one-on-one with a skilled and
accomplished trader. That's why it's a good idea to join Forex clubs and groups and get to know other traders.
Do that and you stand a chance of making solid profits early on.