Learning Forex - The Complete Guide
Making a living without spending days in the office? To many, this seems impossible. But only not for those who have mastered Forex trading - the international currency market.
Forex (Forex) is an international foreign exchange market, where the currency serves as a commodity. Here they buy dollars for euros, euros for dollars, and so on. Thus, each pair of currencies is a separate instrument. Forex works around the clock during the working week - private traders trade with forex brokers, brokers with banks, and banks with each other.
Many would like to try their hand at currency trading, but do not know where to start.
How to start trading Forex?
Forex is one of the largest markets in the world. At the same time, the bulk of its participants are private traders who profit from changes in exchange rates. Simply put, the universal trading principle “buy cheaper, sell more expensive” works here as well. Anyone can become a Forex trader. Neither the level of education, nor the degree of employment, nor well-being are practically irrelevant here. There are many subtleties in currency trading, but there are no insurmountable obstacles.
The process of “incorporating” into the trade can be broken down into several stages.
Choosing a broker
To get started in Forex, you need to choose a broker that will open up access to the market. Brokerage companies provide technical means of trading, that is, programs with the help of which you will conclude transactions, as well as offer the necessary information support and training services in Forex trading for both beginners and experienced traders.
There are quite a few brokerage companies. No matter how trite it sounds, before concluding a contract, you need to make sure that the broker is a member of the trading platform on which you plan to work. Most of them provide access to trading on the MICEX and RTS, and only a few also offer to perform operations on international exchanges and the Forex market.
Among them there are forex dealers who work within the framework of Russian legislation and are licensed by the Central Bank. At the beginning of 2019, these are four companies: Alfa-Forex, Finam Forex, VTB Forex and PSB Forex. However, there are also forex dealers under foreign jurisdiction, since they are registered abroad. Which broker to choose is up to the client, of course. What else is worth paying attention to? Learn more at the https://forex-up.com/broker-reviews/exness-review/exness-raw-spread-account-review/
This can be judged by the number of open client accounts. The current list can be found on the MICEX website. However, the more client accounts a broker has, the less his client can count on an individual approach.
Maintenance cost. The commission, which is a percentage of transactions in the market and is charged in any case, regardless of the success of the transaction, can range from 0.001% to 0.1%. In addition, you need to clarify what the cost of withdrawing funds from your chosen broker.
Another point to be clarified is the minimum deposit, or the so-called entry threshold, from which the broker is ready to work with clients.
It is important to obtain a shoulder lending service in the bidding process. That is, if the customer can with the support of a broker to buy assets in the amount b of greater than it is on deposit. If the client assumes that such a service will be necessary for him, then it is necessary to find out in advance on what conditions it is possible to carry out such operations, what is the size of the leverage .
The availability of training programs and a demo account for novice investors is an additional plus. In addition, some companies that offer such services allow you to use the help of investment advisors free of charge . With the help of a demo account, the same transactions are made, but without the participation of real money. You should definitely take advantage of this opportunity before you conclude an agreement and transfer real money to the broker.
There is an up-to-date rating of Forex brokers operating in Russia and Ukraine. It was compiled based on the results of monthly analytics and the results of voting by traders of all levels - from beginners to pros. This rating can be found on some specialized portals such as forex-ratings.ru.
We are learning to play Forex for beginners
As already mentioned, in order to start playing Forex, you do not need an economic education. However, a beginner who knows absolutely nothing about the currency trading market is doomed to failure. Therefore, before you start playing Forex, you need to figure out what's what. This can be done in several ways:
- Read special literature. Many books have been published on how to get started in Forex. Many of them were written by practitioners - successful traders who once, like you, started from scratch. In addition, there are many articles and blogs on the Internet dedicated to the Forex game for beginners. This will give you a general idea of how the international foreign exchange market works, what analysis and strategies are, how much to start trading in Forex and how to increase your chances of success;
- Attend several seminars and master classes. Seminars are regularly held in any major city. Very often, brokerage companies themselves organize such training meetings with successful traders and analysts - participation in them is often free. If for some reason you cannot complete training at such a seminar, it does not matter, the same brokerage companies hold webinars - online seminars, the effectiveness of which is no lower;
- Open demo account. Both of the above methods of learning to play Forex will give you a good theoretical foundation, but practical skills are required to be successful. A demo account, like a regular trading account, can be opened through a brokerage company. As a rule, the opening service is absolutely free. This account is absolutely no different from a real one: you also trade currencies, monitor the market, conclude deals, earn or lose money. The only difference is that this money is virtual, that is, you will not earn any real funds, but in case of failure you will not lose anything. A demo account is something like a trading simulator, although there are no artificially created situations, everything is for real. It allows you to get your hands on, get acquainted with all the possibilities of the Forex trading program, learn how to navigate the real foreign exchange market, try out trading strategies. In addition, with the help of a demo account, you can earn start-up capital. Large brokers regularly hold contests on demo accounts - the winner who earned the most money receives real funds, which are transferred to a real trading account.
Defining the goals of the game
To know where to go, you need to know where you want to go. To be successful in Forex, you need to know exactly what you want to get. Do you want to take risks and make a profit in the shortest possible time or do you prefer a stable small income, but without the risk of losing a significant amount? Looking for a long-term investment? Forex is not a casino, there is no place for emotions, the key to success is not luck, but cold-blooded adherence to the system.
Choosing the type of control
In other words, you have to decide who exactly will be in charge of your business and the conclusion of transactions.
Assumes that the trader himself will monitor the market situation and conclude transactions manually. This type of management is most in demand, especially if Forex is not only a way for you to make money, but also an opportunity to assert yourself. Traditional trading will give you unique experience and market knowledge. It is this type of game that makes newcomers professionals. But traditional trading takes time, and besides, it is fraught with risks, as any novice trader makes mistakes.
Involves the use of robotic programs that themselves analyze the market and make transactions. This type of trading involves almost no involvement in the process. You go about your business, and the robot trades. This is convenient, especially if your goal is not to learn how to play Forex, but to invest in some surplus funds profitably. It should be said that you will not earn millions in this way. In addition, a robot is a robot - like any program, it can malfunction or misjudge the situation.
This is the transfer of the rights to conclude transactions to a professional trader who will not make those mistakes that a beginner or a computer program can make. Trust trading involves a reward for the trader, but this method is considered more profitable than automatic management, and looks much less risky than trying to trade on your own. But this is the case only in the case of a successful choice of an account manager and a brokerage company that provides trust management services.
Choosing a Forex Trading Strategy for Beginners
A trading strategy is the most important element of Forex trading. There are a lot of strategies - over a hundred, and you will need to choose the ones that best suit your needs.
Strategies are divided into several types based on the time of transactions - they can be short-term, medium-term and long-term...
Short-term trading or scalping, assumes that the trader monitors insignificant fluctuations in the rate for a short time - no longer than a day, and more often - several hours. By making several trades a day, the trader makes a small profit on each one, and as a result, the amount can be quite significant. Perhaps scalping is the optimal strategy for a beginner trader. The downside of this strategy is the need to devote a lot of time to Forex.
This is holding an open position for up to several days, or even a couple of weeks. To successfully apply such strategies, a trader needs to thoroughly study the current economic environment and charts in the process, making adjustments if necessary. Requires less presence than scalping, but more theoretical knowledge and immersion in the subject.
Is a strategy in which a trade remains open from several weeks to several months. Such strategies are suitable for those who have invested substantial funds in Forex and are ready to study global trends.
Within each of the listed strategies, dozens of techniques and approaches can be distinguished, but this is a topic for a separate conversation.