Forex Trading which is also known as FX or Foreign Exchange Trading, has become a hobby for many, a part time job for others, and a full time job for some.
Just to show how popular it has become, it is estimated that the average turnover is about four trillion USD per day.
There are so many reasons that can make one want to become a forex trader, and once you’re set on that, then there are a number of things that you need to know before you can start earning from trading.
Ease of Entry Into The Market
If you are interested in becoming a forex trader for whatever reason, to supplement your income or simply as a past time activity, then look no further than the internet.
Similar to the equity markets, but exhibiting some slight differences, forex trading is now something that all average Joes can engage in, and not just banks, big financial institutions and wealthy individuals, like it used to be in the past.
Once you think you can come up with adequate capital, and trading is what your heart is set on, then by all means follow the necessary steps towards becoming a forex trader, and you’ll start reaping fruits of your labor.
Learning From Experience
To think that you can just wake up one day and become a successful forex trader would be a very bad dream.
Just because your neighbor or a co-worker made it sound so good and easy, doesn’t mean that you should not invest your time to learn more about forex trading.
It is not unusual to see people who started trading today, make such huge profits the next day, but that doesn’t necessarily mean that it will be the same case for you.
Experts advise that if that were to ever happen to you, that is, if you started trading today, and by tomorrow you had garnered major money, then take a moment to reflect.
Don’t be greedy and rush into buying and selling, hoping that fate will strike you the same way again.
Instead, seat back and watch. Thoroughly go through what you did the previous day, analyze, take notes and just try to see what trends were going on then, and what might have gotten you to where you are today.
Training and Mentorship
If you’re that person who doesn’t want to take that risk and start off blindly just because the neighbor told you so, then please take some time to get the necessary training.
The internet is your friend, take a moment and appreciate technology. You might want to use the net to find a number of brokers. Start with this site, www.forextradingbig.com, to equip yourself with some essential trading tips.
Do your research and find out which one will be the best to go with. If you’re lucky enough to get a very good one, then this broker will be the perfect mentor, not just one who wrote a book about trading, but one who actually trades himself and has made money out of it.
In the long run, you might actually turn out to be a better trader than your teacher. There are also some mobile applications that are forex oriented.
A person that spends more time with his phone as compared to the computer, might actually opt to take this route of mobile trading.
This way, anytime you want to check on trends, or catch up with financial news, the information is just a hand stretch away.
Remember, the beauty of it all is none of this requires you to quit your job. You can schedule certain time each day, or even on a weekly basis, to use for training.
Continuous Education
Strive to open various demo accounts that many brokers offer. With the demo accounts you can trade without using real money.
Study the trend(s) over a period of time, and see whether you have a grip of what’s going on in the market, then get out in the real world and start trading.
I’m sure that with the training offered, you’ll also be educated on the terminology, to enable you keep up with other traders.
Lots of ‘big’ words like liquidity, spread, and so on, are used. To be able to understand what’s going on better, before buying and selling, then one needs to get a grip of such words. Click here for a glossary of some important forex terms.
Flexible Schedule
As I had mentioned earlier, the best thing about this, unlike the stock market, is that it’s 24 hours a day, 5 days a week business.
You can trade in the morning before work, or in the evening after work. You don’t necessarily have to lose your job over it.
If you discipline yourself well, in terms of time management, then you can be able to live a fulfilled life, juggling between forex trading and your full time job.
Experts in the business advise though, that even if the trading is open 24 hours a day, you should schedule yourself to be present for trading when the traffic is at its most.
That way, you’re guaranteed that there are many available buyers and sellers to work with.
Keep Up With The News
It is also important to be quite aware on what’s going on around you and all over the world. Be keen on what the news of each day is, be it general news or financial.
A savvy trader always knows how such news will affect the day’s exchange rates, and in return, use that to his or her advantage.
Summary
To avoid major disappointments, it is advisable to not quit your day job, but in fact, work at excelling at it.
That way, you will find yourself living a more balanced life, in that if you happen to show a loss in the day’s trading, it won’t affect you as much as someone who is totally relying on forex trading for income.
It is an exciting field to venture into, yes, but it gets even better if entered into with a sober mind.
You will reap better results if you’re patient, observant and much disciplined.
Photo credit: Mark
