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Learning to Trade Forex – A Simple Guide!

Posted on Jun 10 2008

Learning to Trade Forex – A Simple Guide!
By Peter Burke

Don’t jump in the deep end by putting $1,000 down and then thinking you are going to double it within the year without doing much work! That doesn’t happen. The most likely outcome of such enthusiasm is usually burn out with the person losing the initial trading deposit.

As a start you should familiarize yourself with the terminology that traders use – for example what are ‘pips’? What is a margin trading account? What is technical analysis? What is a Trading Platform? These are basic elements that you should know plus many more things!!

Visit Forums

If you feel that forex is for you visit forex forums, ask questions, try and get a feel for the market and the temperament of traders. Try and sort out who the ‘real traders’ are from the ‘ego trippers’.

Open a Practice Account!

When you feel that you are starting to get at least a basic knowledge then look for a company (usually a brokerage company) that supplies a trading platform and a ‘practice account’.

If you haven’t traded before and you are a complete ‘newbie’ to this business (yes -treat it like a business) learn as much as you can by ‘doing’.

Once you have got to the practice trading scenario, try and ‘replicate’ what it feels like to both gain and lose money – put some money aside and add and take away appropriately according to your results on that day.

One of the first lessons you should be learning is never never over-stretch your finances.

Don’t over-margin your account!

When learning to trade forex you will need at some stage to start trading ‘for real’ on a margin account but don’t leverage $1,000 up to $100,000 your broker may cut your position to limit any exposure their company may have if your position goes against you – so only utilize 15-20 times at first – gain confidence and with confidence knowledge and skill expand your leverage.

To find out more about what it takes to be a profitable forex trader join my Free Weekly Newsletter which is filled with tips advice, guides and product reviews. Join here.

Peter Burke MBA has been writing Journals and Articles for academic publications for over 7 years and is Managing Director of a Consulting Company in the United Kingdom.

Article Source: Peter Burke
Learning to Trade Forex—A-Simple-Guide

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