Forex Trading – a concise guide.
New to FOREX? Don’t have a clue where to start? Well as briefly as possible here’s what you need to know from a Professional Forex Trader What is FOREX? Forex (Foreign Exchange) is the market where counties currencies are bought and sold by anyone from Governments down to retail traders like me – and possibly you soon!
How does Forex Work?
Like any market you have people wanting to buy and people wanting to sell. Unlike any best forex broker other market there is no discernable “product”. You can for example, buy Pork Bellies on the CME, or Shares on the NYSE but the Forex market simply trades one currency against another. So the British Pound is traded against the US Dollar, or the Japanese Yen against the Euro and so on.
Also unlike any other market there is no actual market; trades are not matched up on a single exchange but are spread around the world on servers. It is also as a result, unregulated; that doesn’t mean it’s “dodgy”, just that everyone trades “in agreement” with everyone else using the accepted methods, rules and customs.
How do you trade Forex?
Until early 2000’s you couldn’t trade (unless you had the odd $1m to trade on the InterBank Market). Brokers appeared who would allow you trade small positions of $100,000 using margin and thus required maybe only $1000 from the trader to hold that position. The advent of online trading and the Internet made all this possible. As time went on the business rapidly expanded and you can now trade “micro lots” of just $10,000 requiring just $10 or $20 as a deposit. In the UK and some other countries (the notable exception being USA) “spread betting” also is a way to trade the Forex Markets.
What do you need to Trade?
And here’s the good news; Forex is THE easiest market to get access to for trading. I have traded Options, Commodity Futures, Stocks and so on. They all require quite expensive charting software, you have to pay for data, and you need to trade with a broker who could require up to $25,000 just to open an account.
With Forex, it’s easy. The Charts are free and perfectly adequate to trade with professionally. The data is free. You can open an account with around $250 and, (yet another huge advantage here) you can trade exactly as I do yet only risk $10 per trade. This gives you the opportunity to learn to trade, with real money, but not risk your future mortgage payments on it! It’s also, from a psychological viewpoint perfect to trade with real money, yet not incur the pain of large losses.
Why doesn’t everyone trade Forex?
Because it’s fantastically risky, you can lose everything you have in 10 minutes, it takes years to learn how to trade it, it requires innate skills and abilities, YOU can’t do it…….. Well these are a few of the reasons so called “traders” or brokers will give you. It’s all lies. YOU can trade, especially Forex but here’s the real reason not many people actually make any money from trading Forex, or most other markets come to that.
THEY DON’T LEARN WHAT THEY NEED TO KNOW
Imagine learning to drive a car and never being told about the brakes; or trying to build a house yourself with no previous knowledge. This is the way most people (the losing 90%!) try and trade.
The Internet is the main culprit – there is an almost unimaginable amount of pure rubbish online (not just about trading of course) due to tradings’ attractiveness as a “get rich quick” scheme and “work from home for 2 hours a week” and so on. This makes getting any form of “real education” very difficult and hit and miss at best.
- So the advice is this:-
- Realise that learning to trade requires effort, time, money, dedication, persistence….. and anyone saying otherwise is NOT a real trader so move on quickly to another website.
- Trading, including Forex trading, can make you fantastically rich. But so can being a top athlete, a pro football player, a racing driver…….. are ANY of these easy? No, and only the top 1% ever make it big, but, you can still make a very comfortable living trading and enjoy all its advantages. So have realistic expectations and work towards them.
- Realise TODAY, that there is NO SECRET, there are NO magic systems, there are NO robots that work, and you do NOT need the latest software at $4950. You DO need to learn the art and science that is trading and it’s just simple stuff that anyone can understand and use.
If I can help in any way I am always pleased to so get in touch.
Best regards and be careful out there.