Forex beginners are always eager to learn forex trading online as an opportunity to make money and they always wonder how to get started. It’s important to have a deep understanding of how the market works and best practices for forex trading.
By educating yourself, you can better manage your risk, trade profitably, and set yourself up for success in your new investment. While forex trading is easy to learn, you’ll still have to practice and embrace your mistakes.
Learn Forex Trading
There are many ways to learn forex trading, they can either be free or paid. Before investing your money, it’ll be better to invest in knowledge and educating yourself. Forex trading is based on the ability to understand trends and spotting opportunities in the markets. Therefore, the main step to learn forex trading is to believe in self-education and to be patient with your progress.
For effective trading, it’s crucial to get a forex education. You can spend some time reading up on how forex trading works, active forex trading times, making forex trades, and risk management, for beginners.
Can forex beginners learn trading on their own?
Absolutely, there are plenty of online resources to learn the basics. However, attending online courses and getting in touch with professional traders will help speed up the process. This will help you avoid common mistakes made by beginners.
But eventually, nothing beats experience. So, if you want to learn forex trading, experience is your best teacher. After getting more knowledge about the basics, try to open a forex demo account and try out some risk-free trading. This step will provide you with a solid foundation on the mechanics of trading forex, and help you get familiar with a forex trading platform.
The Forex Basics
What are the forex basics? and how to learn it? The key step is to start your journey by learning the basics of the market. Understand what currency pairs are, what affects currency value, how the market works, the best times to trade, and most importantly how to manage your risk.
From day one you will need to get yourself familiarized with the trading platform. Metatrader 4 enjoys a user-friendly interface and provides ample opportunities to traders of all skill and experience levels.
To learn Forex trading as a beginner is usually recommended to be as risk-free as possible. There are three approaches to do so:
- Self-learning through online guides
- Copying successful traders
- Learning while trading and making mistakes
Common Mistakes made by Forex Beginners
No matter which learning approach you choose, there will always be chances for mistakes to happen. Mistakes happen almost all the time, even traders with decades of experience tend to make mistakes as well. It’s common, so no need to worry about it. All you have to do is learn from your mistakes and avoid them later.
However, you can save yourself a lot of time and avoid possible losses by trying to avoid mistakes made by others. Here are some mistakes that are usually made by beginners:
- No Research: Some newbies enter the market without doing their research, which usually leads to major losses. Research is gathering information. In a very dynamic market like the forex, dominated by rules of demand and supply, you have to know what affects the market. Same as any investment, you should learn first before risking your capital. Research allows you to determine if a specific event would have influenced your trading positions.
- Trading Uncommon Pairs: For beginners, it’s always advised to trade on major and common pairs. They are easier to follow, analyze and trade.
- High Leverage: The leverage is an investment tool of using borrowed capital to maximize an investment’s potential return. It’s one of the major benefits of forex trading offered by brokers. However, beginner traders tend to use high leverage to maximize their profits. But it ends up magnifying their losses as well. So, it’s better to start with lower leverage to contain any possible losses.
- Trading without a Plan: Setting up a trading plan with defined goals is very essential. You can seek advice from professionals until you build a solid experience. It’s very important to strictly follow your plan and monitor your goals periodically.
Getting Started with Forex Trading
Find a Reliable Broker
The Forex broker is an intermediary entity between retail traders and the forex market or the interbank system, in which major banks trade with each other. The broker provides financial services to facilitate the process of buying and selling foreign currencies for retail traders. There are many aspects to consider while choosing the best forex broker including regulatory compliance, currency pairs offered, customer support, and trading platform.
Open your Live Trading Account
Demo accounts and no deposit bonuses may provide risk-free trading for forex beginners. But it’s important to consider how influential a trader’s psychology is. No matter how long you’ve been practicing, live trading will have so much to teach you. One of the main Forex trading lessons for beginners is that fearing risk is an advantage and not an issue, and it is only gained when you put your own capital on the line. Open a Forex Account and start your trading experience.
Learn Forex Trading Glossary and Keyterms
To start trading it is very important to learn the main forex trading terms commonly used in forex trading. Several terms can be not easy to understand for forex beginners when they enter the market. However, it is highly important to start learning the main glossary so you are able to understand what other traders are talking about.
Ask Price: In forex, the Ask is the price at which the market is prepared to sell a product. Prices are quoted two-way as Bid/Ask. The Ask price is also called the Offer.
Bid Price: In forex trading, the Bid price represents the price at which a trader can sell the base currency, shown to the left in a currency pair.
Lot: A standard unit 100,000 is used in forex trading to measure the amount of the trading deal. The value of the trading deal is always measured to an integer number of lots. There is also a micro lot which is 1,000 of the base currency, and a mini lot which is 10,000.
Trade with Money you can afford
One of the primary pieces of advice given to new forex traders is never to risk money you can’t afford. Forex trading can be risky and that’s why you should calculate your risk and how much you can afford to lose. Having a good Risk Management plan can be very helpful in this regard.
Choose a Strategy to follow
Almost every trading Forex tutorial gives traders a different trading strategy. First, you need to define what type of trader you are and what are your goals. Then you can choose a trading strategy accordingly. Check the top Forex Strategies in 2021 and decide what best suits your goals and trading style.
Start Trading Currency Pairs and Join AximTrade
Forex analysis is usually provided by professional traders and market experts who already have solid experience in analyzing the financial markets. Usually, at the beginning of the week or after major new releases, the forex professionals will provide technical analysis on the major pairs or gold and this includes trend analysis and other indicators such as the moving average. Therefore, we help the traders and forex community by providing weekly forex analysis and forex news to help traders to predict the market and as well to learn forex trading, forex analysis, and enhance their trading strategies.
Join AximTrade now and explore the best trading conditions and diversity of analysis tools available on our trading platform. AximTrade is a leading platform with flexible leverage for margin trading, which is one of the top competitive leverage conditions.