HEALTHY FOREX TRADING
The foreign exchange market (FOREX), is a market in which currencies are either bought or sold. The Forex market is the worlds largest financial market with the biggest being the London stock exchange followed by the New York stock exchange. Combined with other markets spread across the globe, the Forex markets hit more than a trillion units bought and sold on a daily basis. The value of a currency in the Forex market is dependent on another, this is known as a currency pair, with the first currency know as the base currency and the other known as the counter currency. The currency pair indicates how much of the base currency is needed to purchase the counter currency. Examples of currency pairs popular amongst traders are the GBP/JPY, GBP/USD and EUR/USD. Many other currency pairs are available in which traders can buy or sell. Many traders new in the Forex market assume it is a 50/50 gabling process or an avenue to get quick money. They dive into the market without learning the basics and with time loose all of their investments. The first step towards a profitable Forex trading venture is knowledge. We have heard a time too many that knowledge is power, in the Forex market know ledge is everything. Take time to understand the terminologies associated with the market such as the leverage which is the amount of risk you’re willing to take, the spread, the asking and bid prices and other technical terms. Trade in currency pairs you have access to data, such as interest rates, budgets, consumer sentiment, unemployment, political atmosphere and other monetary policies. It is advisable to trade in currency pairs within your locality if you don’t have satellite television or access to data from other countries.
There are numerous Forex, brokers available on the internet today with many offering both desktop and web platforms for you to trade in. it is important that research is carried out on the broker you intend on using. Many brokers differ in how they charge, while some charge by spread some charge by commissions, some brokers offer lower spreads than others. Do research and find one that you are comfortable with. You should also note that while the Forex market is a regulated one, these regulations differ based on the country the brokerage is domiciled.
In trading it is highly advised you trade with the demo account made available by most brokers. Demo accounts have between $10,000 - $100,000 and offer real time trading experience. Trade for a while and when you get the hang of it try investing a little of real money. For beginners use low leverages (X10 or 0.01 lot) and below. As with any business or investment you have to know what you want to achieve form the investment. And this is tabled in the form of a plan, were strategies are laid out and a goal or target set.