Forex or the foreign currency exchange market tends to be a very
popular way of trading for those who are considered novice traders. It's
the kind of trading that will allow them to trade any time they want
day or night and they can still work a different job to bring in an
income for themselves. However, if you are really new to Forex it is
vitally important that you realize that there are a lot of risks that
could lead to huge losses. It is one of the most active markets but it
is also one of the most volatile as well. Also it is important to note
that the accounts can be highly leveraged and this can lead to even
higher risks.
It doesn't matter if you have a broker or not, but
if you are really new to this you need to get access to a free virtual
simulation of Forex trading. This can be done by going to any broker
site and setting up a demo account. Before you do a real time live
trading it is highly advisable that you take advantage of one of the
many different demo accounts that are offered. This way you can be in a
realistic trading environment that lets you make fake trades in real
time. This alleviates the chance of you losing a lot of money when you
first start off. The demo is identical to the real deal it's just that
you work with a fake account and fake capital. You should use the demo
for as long as you can or until you start making fake money
consistently, then you can move over to the real money and trading.
You
really should find a broker that doesn't allow really high leverages.
There are some that will allow a trader up to 50 times buying power of
their actual cash that they have in their account. So if you have just
$1,000 they'll let you buy $50,000. This could set the trader up for a
big, big risk and huge loss. So it's best to find those that have much
lower leverages, especially when you are first starting out!
If
however, you cannot lower the leverage there is another way in which you
can play the trade market a little safer. What you can do is simply
choose to trade in a lot smaller amounts of currency. But you will need
to have a discussion with your broker on this. A lot of the accounts
only allow a minimum of 100,000 units of the currency in one trade. If
you want something less you will need to downgrade yourself to what is
called a "mini" account. This way your minimum could be just 1/10th of
the 100,000 minimum. You can also consider opening up what is called a
"micro" account and this will allow a minimum of just 1,000 units of
currency.
Even if your Forex account is at a low risk with low
leverage or the lower minimums there still is that chance that you could
lose an awful lot of money if you haven't figured out a good strategy
for your trading. If you don't come up with some sort of strategy is
almost always a guarantee of failure. When you are a beginner, just to
make it easy try just going with the trend following type of strategy.
Look at a chart and then draw or just imagine a straight line that
connects the lowest prices. If the line can connect show at least three
lows connecting then the chart is showing that there is an uptrend
happening. You only want to buy the currency when the rate doesn't hit
this line you made. If the trend happens to remain then this means you
will profit off of the currency you bought into. If the rate happens to
fall through the line then you will need to exit with a small loss.
Note:
One of the best things you can do is to find a training class online
and study the different strategies and all of the different terminology
before you even set up your demo account.
For more free Forex Trading Information download Amy's Free Forex Trading Information Pack at http://www.free-forex-trading-info.com and join thousands of other people who are investing successfully in the currency market.
For other free information on a variety of issues please visit http://www.free-info-site.com
For other free information on a variety of issues please visit http://www.free-info-site.com
