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How do I start trading forex?
How to start trading Forex… and perhaps make money for yourself.
Step 1. What is Forex?
Step 2. Learn Forex Basics
Step 3: Find a Forex Broker
Step 4: Start Trading
Step 1. What is Forex?
Forex, or Foreign Exchange is an unregulated market, also known as OTC (Over-the-counter) and is the biggest market with average daily turn-over that runs into billions. It is even bigger than the US stock markets. Although due to its OTC nature, no one can really give the correct numbers as to the forex turnover. But nonetheless, forex is indeed a big market and thus allows many market participants. From your neighborhood bank to specialized investment companies, to your friend; the forex markets always offers a piece of the action whoever you are and wherever you are (even from your home).
The basic concept of trading forex is very simple. You trade or speculate against other traders on the direction of a currency.
So, if you believe that the Euro is going to rise, you would BUY the Euro, or SELL the Euro if you think the Euro would fall. It’s as simple as that.
Step 2. Learn Forex Basics
How to start trading Forex online
Before you get ready to deposit your funds and start trading there are some important points you must understand, each of which are outlined below.
Forex Brokers: In order to start trading forex, you will need to trade with the help of a forex broker. There are many forex brokers out there today who allow you to open a forex trading account for as little as $5. The forex broker is the one who facilitates your buy and sell orders and also allows you to research into the markets (also known as technical or fundamental analysis) to help you make more informed decisions… and of course allows you deposit more funds or withdraw your profits when you want to. ( Click here to see our Forex brokers rating )
Trading Platform:You need a trading platform from which you can place your trades, which are then sent to the broker for settlement. Also, a trading platform is essential for you to conduct your technical analysis and also to see the current market prices. Most retail brokers offer the MT4 (short for MetaTrader 4) trading platform, which is free of cost. You can also open a demo trading account and practice trading with virtual money to gain the experience required before trading with real money.
Forex Trading Hours:While you might have heard that the forex markets never sleeps, it actually does. Firstly, you won’t be able to trade on weekends (Saturday and Sundays). But for the rest of the week, the forex market operates 24 hours a day. This is due to the fact that forex trading is global. At any point in time, you will always find an overlap of a new market session while the previous market closes. What time of the day or which market session you trade plays a big role if you are an intra-day trader or a scalper. This is another vast topic, which we will cover at a later stage. ( Click here to learn more about forex trading hours. )
Now that you have a basic overview of the forex markets, here are some final pointers to remember before you start trading for yourself.
What is a pip?:Pip is a measure of change in a currency pair’s value and is the 5th decimal. For example, if EURUSD changes from 1.31428 to 1.31429, the change is denoted as 1Pip (1.31428 – 1.31429 = 0.00001). When you trade, the more pips you make, the more profit you have. Ex: Buying EURUSD at 1.31428 and selling (or closing your trade) at 1.31528 would give you 100Pips in profit. ( Read more about Forex PIP )
Reading quotes: Forex quotes are presented in a Bid and Ask price (both of which vary by a few pips and from one broker to another). The Bid price is the price at which you can buy and the Ask price is the price as which you can sell. So, a EURUSD quote would look like this 1.31428(Bid)/1.31420(Ask).
What is a Spread?: Spread is nothing but the difference between the Bid and Ask price. So in the above example, for 1.31428/1.31420, the spread would be 8 Pips. ( Read more about Forex Spread)
What is a Leverage?: Leverage is the amount by which you can request your broker to magnify (or increase) your trade value. Leverage is often quoted in ratios such as 1:50, which means that when trading on a 1:50 leverage, your $100 is magnified to $50000. Leverage is a big topic in itself and it is recommended to read this article to learn more. Leverage is important both in terms of making profits as well as managing risks and therefore, your trades.
What is a Lot?: A lot is a unit by which you place your trade. In financial terms, a lot is also referred to as a contract. There are preset lots (or contract sizes) that you can trade. For example a standard lot is nothing but 100,000 units (known as 1 lot). ( Read more about Lot)
Reading charts: The ability to understand and read the charts is very essential to trading. Depending on your approach, you can choose between a line, bar or candlestick charts and trade accordingly (for example trading based on candlestick patterns). ( Read more How to read forex charts)
Placing Orders (How to buy and sell): In forex trading, it is possible to either buy or sell any currency pair. Most trading platforms, give you this option. You Buy when you think that price will go up and you sell when you think that price will fall. There is a common terminology used in forex trading, which is Buy Low, Sell High; which is an important point to remember. ( Read more How to place orders with MT4 )
Order Types: Besides buy and sell, another point to remember the types of orders. There are two basic order types: Market orders and pending orders. When you click on ‘Buy’ or ‘Sell’ you are basically buying (or selling) at the current market price. A limit order on the other hand tells the broker that you want to buy or sell only at a particular price. ( Read more about Types of Forex orders)
Step 3. Find a Forex Broker
forex how to start - Find a Forex Broker
As mentioned, there are many forex brokers today and therefore it can get confusing on how to choose the forex broker that is right for you. To briefly summarize, remember the following points while choosing a forex broker:
Look for a forex broker that is regulated
See if the forex broker offers a minimum deposit amount
What is the leverage that the broker offers
What is the minimum contract size that you can trade
Bonuses and the terms and conditions (see on our site list of Forex Deposit bonuses and Forex No Deposit bonuses)
Deposit and Withdrawal types as well as the terms and conditions
Trading methods that are allowed by the broker
We can also help you choose a forex broker by reading our article How to choose forex broker
Step 4. Start Trading
Finally, now that you have selected a forex broker to trade with it is recommended to first open a demo trading or a practice account. Most forex brokers offer unlimited demo trading account (but will be deactivated if not used for 30 days). This is a good way to get acquainted with the forex markets and also help you to understand your trading style (scalper or intra day trading, swing trading, etc) and approach (fundamental or technical analysis). You can search for various trading methods and systems or you can develop one yourself when you have a good understanding of technical or fundamental indicators.
Need more high profit gain and safe robots, here it is Portfolio of expert advisors for trading at Forex market with Metatrader 4 (14 currency pairs, 28 forex robots)
https://forexfactory1.com/p/EuHp/
https://forexsignals.page.link/RealTime
How do I get started with Forex trading?
The live Forex markets no matter which one you chose to work in are an intimidating and brutal for someone who starts off with the wrong information and they can be a mysterious, murky, and complicated place for the ill advised.
Does one need to be intelligent? It is not rocket science.
By following the advice in this answer post and keep it simple and take it very slow and absorbing every detail you can have the best chance for a high probability outcome as a successful market participant. Should you decide not to listen to what it says, you will have a verrrry looong and expensive journey and you WILL lose all your money, I assure you of that! Don’t be that trader! Make no mistake, the market can make you lose your mind, burn your soul, and help you to lose all your money. Quickly!!
There is a certain progression of things that all brand new investors and traders need to know and study none of which happens quickly. Unfortunately, no one tells them in the beginning that most of the information they need is basic and is mostly common sense, buy low sell high. They don’t usually find out until it is too late for their account and they have blown out or ran it down so far they cannot trade live anymore until they deposit more risk capital.
Should you decide to try to take any short cuts or side step any of the learning process, you can be assured of losing some or all of your money in the live market. The learning curve in this business is different for everyone, some people catch on to it right away while it takes others quite some time to “get it”.
I encourage you to take as much time as you need to learn everything you need to know for the style of trading or investing you wish to do and build your rule based trading plan around that style. There is a lot to know to be successful in this business and the more you can know in advance the higher the probability of you having a positive financial outcome from working in the live market, anything else is not acceptable, trust me the market is always going to be there waiting to pay you.
The average time frame that it takes someone to go from starting with absolute zero knowledge and learning the trading business from scratch to consistently profitable on a daily basis is said to be in the neighborhood of 3-5 years, I know that’s not what you want to hear but it is the harsh reality. The reason the learning curve is so long for some brand new traders is because they try to learn everything all at one time.
You first need to become familiar with:
chart reading/ price action
how the trading platform you are using works
money management
your own trading psyche
market dynamics
supply and demand trading
how to develop an edge to beat your competition
This list can go on and on for a long time depending on how much you want to learn. The end result of not doing the proper preparation in this business though is that you lose all your money.
The progression of learning is money management first, why do I put it first in the list you may be asking because if you lose all your money in the market from lack of managing it you can't be in the market. Then would come chart reading and how to build out a price chart properly, learning how to use supply and demand as your trading method, your trading psychology and composing a rule based trading plan.
What books to read? If you're a raw beginner and wish to invest and trade on your own have a look at any of these books.
Just paste the name of the book into your favorite search engine.
If you’re considering trying to trade intraday and you are a brand new raw beginner read anyone of these books first:
The Brutal Reality of Day Trading for Beginners By: J.R. Calcaterra
Day Trading Truths and Lies By: Joe Zordi
Day Trading IS Day Gambling By: Mar Ketmaker
Death by Day Trading By: Zordi Cobre
Day Trading Myths Revealed By: Richard Christopher
The Truth about Day Trading By: Joe Soldi
FOR RAW BEGINNER TRADERS JUST STARTING OUT:
How to Trade Using Easy End of Day Signals By: J. Bosanko
10 Steps to Profitable Trading as a Beginner By: Slacker Trader
Trading without Indicators By: Jose Mosca
Beginner Investors & Traders Reference Bible By: Joe Penge
How to Get Started in Online Trading for Self-Directed Beginners By: J. Lefric
How to Day Trade on a $500 account By: Joseph Quattrini
The 3MS&D+3 Investing & Trading Method By: Slacker Trader
How to Trade Online as a Beginner By: R. Rond
FOR TRADERS IN THE LEARNING CURVE
How to Start Day Trading with $500 By: D. Thrader
Market Timing Solutions for Beginner Traders By: J. Geruto
How to Invest & Trade on a Small Account By: J.R. Penger
10 Ways to Get Rich from Futures Trading By: Giuseppe Scuti
Multiple Time Frame Analysis for Beginner Traders By: Joe Zordi
Futures, Forex and Stocks Trading $trategies By: J. Chavos
10 Ways to Trade with an Edge By: Shadow Trader
How to become a Winning Trader without going Broke By: Mar Ketmaker
Advanced Trading Techniques for making High Profits By: J. Bosanko
How to Master Trading Performance By: J. Thune
FOR FOREX AND CURRENCY TRADING BEGINNERS
How to Trade Forex on a $500 account By: J. Geruto
Forex Trading using the End of Day Method By: J. Mosca
Currency Trading for Beginners By: Zordi Cobre
Pipology 101 By: J. Corrado
How to be a Disciplined Forex Trader By: J. Chavos
Beginner Forex Traders Guidebook By: J. Gelp
How to Day Trade Forex with a Small Account for Beginners By: Joe Scuti
Simple & Easy Forex Trading Strategies By: Josef Fluse
Forex Trading with the Set it and Forget it Method By: J. Thune
How to Trade Forex with Zero Fear By: Christo Ricardo
FOR SWING TRADING BEGINNERS
Beginner Swing Trading Course By: Joe Penge
Simple Swing Trading for Beginners By: Joseph Geruto
How to Swing Trade for a Living By: J.R. Lira
Easy Beginner Swing Trading Method for High Profits By: Ricardo Moneta
Swing Trading Mastery Guidebook By: Jose Mosca
High Probability Forex Swing Trading for Beginners By: Richard Christopher
Swing Trading $tocks for High Profit By: J.R. Lira
Forex Swing Trading Guide for Beginners By: Josef Dosh
Swing Trading 101 for Beginners By: Joe Monnaie
Beginners Swing Trading Guide for Short Term Income By: Josef Moni
Swing Trading Forex for High Profit for Beginners By: Joseph Richards
Swing Trading Guide for Beginners By: Joseph Sordi
FOR RULE BASED TRADING
How to Build a Winning Rule Based Trading Plan By: Joseph Sordi
Rule Based Supply and Demand Trading for Beginners By: Christoph Josef
How to write a Rule Based Trading Plan as a Beginner Trader By: Shadow Trader
Rule Based Trading for Beginners By: Jose Mosca
How to Compose a Rule Based Trading Plan By: Z. Cobre
FOR FUTURES TRADING BEGINNERS
High Profit Futures Trading for complete Beginners By: J.R. Zordi
Simple Daily Chart Futures Trading Method By: J. Geruto
10 Ways to Get Rich from Futures Trading By: Giuseppe Scuti
Simple & Easy Futures Trading Strategies By: Josef Fluse
Futures Trading for Self-Directed Beginners By: Joseph Penningar
How to Make Money Right Away as a Beginner Futures Trader By: J.R. Guita
Easy Money Futures Trading for Beginners By: Richard Christopher
How to Trade Futures Stocks and Forex without Indicators By: Joseph Quattrini
FOR BEGINNER TRADING PSYCHOLOGY
Beginner Trader Psychology Mastery Guidebook By: Joseph Lira
Zero Fear Trading By: J. Pecunia
10 Ways to Trade with an Edge By: Shadow Trader
How to Trade with Confidence and Zero Fear By: Richard Rond
Trading with a Contrarian Mindset By: Vito Lira
No Brainer Investing and Trading for Self-Directed Beginners By: Moriaco Dinheiro
How to Build a Smart Plan for Beginner Traders By: Giuseppe Scuti
FOR COMMODITIES TRADING BEGINNERS
How to Invest in Crude Oil By: Shadow Trader
Simple Commodities Trading Method for Beginners By: Moriaco Dinheiro
How to turn Water into Money By: Mar Ketmaker
Supply and Demand Trading Strategies for Commodities, Forex, Futures and Stocks By: Joe Okane
How to Swing Trade Crude Oil for High Profits By: Jose Mosca
Beginner's Guide to Investing & Trading Water By: J.R. Calcaterra
FOR STOCK TRADING BEGINNERS
How to Trade Stocks Online on a $500 account By: Giuseppe Picciuli
Simple Daily Chart Stock Trading Method By: J. Geruto
How to make Consistent Profits in the Stock Market By: G. Scuti
10 Secrets to Get Rich from Stock Trading By: Giuseppe Scuti
How to make a Full Time Income Trading Stocks Online By: J. Moriaco
Swing Trading Stocks using the End of Day Method By: Slacker Trader
How to Swing Trade Stocks for High Profits By: Joe Monnaie
Simple & Easy Stock Trading Strategies By: Josef Fluse
How to make Easy Money Position Trading Stocks By: Slacker Trader
Trading Stocks Online By: Joseph Moneta
FUN TRADER READING
The Truth about Day Trading By: Joe Soldi
Effective Strategies for Day Trading Beginners By: J.R. Penger
Best Tips for High Profit Day Trading By: J.R. Christopher
Day Trading IS Day Gambling By: Mar Ketmaker
Shadow Trader By: Shadow Trader
Day Trading is for Dopes By: Richard Rond
Cash Cow By: J.R. Calcaterra
Death by Day Trading By: Zordi Cobre
Day Trading Myths Revealed By: Richard Christopher
Smart Money Trading for Self-Directed Beginners By: J.R. Guita
How to make Money with Money By: J. Pecunia
The Brutal Reality of Day Trading for Beginners By: J.R. Calcaterra
Day Trading Truths and Lies By: Joe Zordi
Day Trading 101 for Newbies By: Joseph Dinaru
NOTE: None of the above list are available in PDF form to my knowledge so be careful of phishing scams to get your credit card information, if it says “free PDF” beware of giving out any of your personal information.
Click on my profile to find out where else you can find me or follow me on my main blog I am also on Facebook, Instagram, Twitter and Pintrest. If you liked this answer please upvote it and share it with your friends on your social media and let them know about me. If you’re a brand new raw beginner you can send me a message here if you need help or wish to inquire about mentoring. If you have a question you would like me to answer please ask your question with my name on it so I can give you the best answer.
Need more high profit gain and safe robots, here it is Portfolio of expert advisors for trading at Forex market with Metatrader 4 (14 currency pairs, 28 forex robots)
https://forexfactory1.com/p/EuHp/
https://forexsignals.page.link/RealTime