For anyone that's a Forex currency trading beginner, it's a bad idea to storm in and begin trading without first getting the necessary skills. First, spend time doing your homework, otherwise you might very quickly lose everything in your trading account. Only once you have thoroughly prepared yourself for the world of trading should you venture into live trading.
To get the ball rolling, find yourself a good training course. These are available in print, on CD and also online. Do a web search to find some alternatives. You can also pick up valuable knowledge for free on the trading forums on the Internet.
Allocate sufficient time to thoroughly study the contents of the course. Make sure you know exactly what an indicator is - both technical and fundamental. Familiarize yourself with how to apply these indicators in your trading decisions. Very few traders have ever been successful without at least one indicator to assist them.
Next, a Forex currency trading beginner needs to become familiar with the use of charts. Study the various types of charts out there, from pie charts to bar charts and from candlesticks to line dot charts. Make sure you are able to immediately understand what a chart is telling you.
Something else you must become used to is to trade within the parameters of a trading system. A trading system is just a word we use to describe the set of rules you draw up yourself to guide your trading activities. It should contain rules about when you should make a trade, and when you should get out of one. It must also limit the amount you're allowed to risk on any one trade and the number of trades you may have open at the same time.
Before you can start trading, you will also have to make a decision about the currency pair or pairs you want to trade. Do not try to become an expert in all currencies. Rather, choose a currency pair such as the USD/GBP and get to know it very well over time. This way you will eventually become very familiar with the way that currency pair behaves under different circumstances.
By now you should be ready to get yourself a demo account at an online broker. Such an account is an excellent chance to put the knowledge you have gained up to now to practical use. The trading circumstances are exactly the same as with a real trade, except you're trading with 'dummy' currency. Only once a Forex currency trading beginner is making consistent profits with his demo account should he proceed to open a live trading account.
