If you’ve ever been abroad, it’s likely that you’ve already conducted a foreign exchange trade or two when you collected your holiday money at a bureau de change or other outlet. But what you might only just have discovered is that there is a whole other world of foreign exchange currency trading on offer, and that’s the speculative market. It’s possible to make a profit from the rises and falls the forex market experiences every single day, and for some, this is their main source of income. If you’re interested, then, here are some top tips for getting started in the world of currency pairs.
Get informed
Before even finding an account and getting started, you first need to get informed. Forex trading has many peculiarities that mark it out from other forms of trading, and these can throw you when you first get started – even if you’ve traded, say, stocks before. All forex trades are, for example, conducted in pairs, and the currency you predict will rise goes first. If you want to speculate that the US dollar will rise against its Australian counterpart, for example, you’ll need to go for the “USD/AUD” pair.
There are lots of other quirks like this one in the forex trading world, and you won’t stand as good a chance of success if you don’t familiarize yourself with them as much as you can. You’ll need access to good quality information on an ongoing basis as well, though, so don’t stop there. Major economic calendar events such as interest rate setting decisions can have a profound impact on a currency, and it pays to know when these will happen so that you can schedule your trades accordingly.
Find a broker
Your next stepwill be to find a broker. You can compare forex brokers online, although you should make sure you work out what you prioritize (low fees, perhaps, or the offer of a sophisticated trading platform) so that you have enough criteria with which to make a judgment. While it’s obviously possible to switch brokers later on, choosing the wrong one at the outset could damage your confidence, so it’s worth devoting a day or two to finding one that suits your forex trading goals.
Be willing to fail
Once the practical arrangements are in place, you’ll also need to work on your mindset. Forex trading is complex for the beginner, and there’s no guarantee that it will go your way the first time around. As a result, you should start out with a demo account or small amounts you can afford to lose: by failing early, you’ll be able to learn from your mistakes and build a better career for later on.
Working as a forex trader is a great career once you’ve managed to get it off the ground, and it’s one that many people across the globe have chosen down the years. But as with any job, there are pitfalls everywhere – and for that reason, it’s vital to select a good broker, find out as much information as you can and make sure that you are connected to economic news on an ongoing basis.
