How to start making money on Forex?
Forex is an international market where round-the-clock exchange of currency pairs takes place at free quotes. The daily turnover of this market is huge. At the beginning of the century, it amounted to about 1.5 trillion dollars, and by the beginning of the first decade it had grown by almost 2.5 times. Initially, the main participants in the Forex trading were large players. But the development of Internet technologies and the mediation of brokers has changed everything. Now everyone can try their hand at foreign exchange trading.
How to start?
To register at the auction, an individual must use the services of a broker. The broker, in turn:
• solves all issues related to the trader entering tenders;
• gives him a trading platform for remote access to Forex;
• provides leverage that allows you to bet on amounts greater than what the trader allows the size of his investments in the trading account;
• accepts funds and orders for transactions, and also pays the trader profit.
It is clear that the broker's intermediary services are not provided on a charitable basis. He takes on his intermediary function for profit. It develops, depending on the trading conditions of a company, from the spread, commission, service fees, etc.
When choosing a broker, you need to carefully analyze his activities, paying particular attention to the following points:
1. Make sure that the company is not a one-day company that will minimize payments and disappear. The longer the term of the broker in the market, the better;
2. Collect information about the quality of service in a brokerage company, preferably from independent sources;
3. Clarify where the broker is registered, who issued his license and how it is controlled, because offshore companies that do not have a regulator may well be unreliable;
4. To study the trading conditions provided by the broker - starting from the amount of leverage, ending with the provision of additional services;
5. Find out which broker offers bonuses, whether interest is accrued on the balance of funds in the trading account, etc.
6. Evaluate the software that the broker offers;
7. To study the methods of input and the benefits of funds - they should be convenient for the trader personally and it is highly desirable that the broker use the services of banks at the same time - their absence from the list of input and withdrawal methods is suspicious.
Where to get knowledge?
Naturally, not knowing the ford, popping into the input is a futile business. And to start trading on Forex, you need a certain supply of basic knowledge and a free understanding of the basic terms. Most often, brokerage companies provide basic training for beginners. It can be video materials, textbooks or educational articles. It also offers free use of a demo account, which makes it possible to study the software and try to make transactions without the risk of losing investments.
In addition, there are a lot of sources of knowledge. It:
• educational literature;
• video courses;
• articles on specialized resources;
• educational trainings.
Communication with successful traders, an understanding of the fundamentals of the economy and the current economic situation in the world, as well as an understanding of the basics of analysis, will not be superfluous.
Personal system and strategies
Having understood how Forex trading is conducted, it is extremely useful to start developing your own trading system. Why is this needed? The answer is simple. Since, especially at first, Forex trading is an extremely emotional activity, a developed system helps to avoid mistakes. Having thought in advance how to act in what situation, and further guided by the created settings, the trader insures himself against spontaneous wrong decisions.
A personal system is a kind of plan or rules that determine:
• under what conditions and how a transaction is opened;
• what will be the trader’s decisions in case of a positive and negative change in the situation, as well as in cases where the situation is unclear;
• what is needed to close a deal.
If, using the developed system, the trader incurs a loss, then it needs to be improved.
Choosing a strategy is also an important stage. According to the duration of the Forex trader's strategy can be divided into:
Short-term - working with small and fairly frequent fluctuations in exchange rates;
Medium-term - working with changes up to months in duration;
Long-term - operating on fluctuations with an amplitude of several months or more.
The more a trader plays, the more experience, analysis and understanding of the economic situation he needs, the more serious the invested amount should be, so that the earnings for them are tangible.
That is why, at the beginning of his activity, the trader is recommended to focus on short-term strategies or scalping.