Hi despicable robot is back with a new beginner friendly series about Forex trading and how a beginner can learn it. In this series we will start from the basics of forex trading and then we will move towards the advanced forex trading tips which can help you to become a good trader.
If you want to read our other blogs here are the links of some of our popular blog posts.
I will also introduce you to my youtube channel which I have specifically made for forex trading. You can visit it by clicking on the link below.
In this channel I will discuss in detail about forex trading concepts from beginner to advance level.
- What is Forex Trading
- How can we make money through forex
- Stop Loss
- Take Profit
- Time frames
- Position Size
- Risk management
- Candle Stick Charts
- Best Profitable Trading Strategy
- Best Moving Average Strategy
- Support and Resistance Trading Strategy
- Scalping Trading Strategy
We will discuss each of these strategies in separate blogs in detail but I will briefly discuss them with you in this blog to give you a quick overview.
What is Forex Trading
Forex basically stands for Foreign Exchange. It is a process of exchanging one currency into another currency.
When do we need Forex Trading
I will explain it to you with a layman’s example. Suppose you live in America. Your local currency is dollars. Suddenly you plan to visit some other country, for instance, England. Now, if you have to buy something there, you cannot use dollars as it is not their local currency. You have to exchange your currency for getting pounds to spend in England. The transaction is called a Forex Trade.
How to make money through Forex Trading
You can earn much profit without any physical effort like the one we have to do in a 9-5 job daily, but it’s more complex. To be a good forex trader, you need to learn it and invest some time in it. You cannot be a successful trader in one night so keep this in your mind before learning to trade.
Now let’s understand the science behind how you can earn money through forex trading. First of all, you have to open an account on any of the forex trading apps. If you are a beginner, make an account on the IG Trading app, as it is beginner friendly. By making an account on the IG Trading app, you can also access educational material related to forex trading on the app.
The currency rates fluctuate every minute, so if you invest 1 euro, you can buy 1.10 dollars. Now you have 1.10$ in your account. Suppose that after some time, the exchange rate decreases. Then you can buy a pound at that low rate, and you will hold more than the initial. Imagine if you invested a significant amount like 10000 pounds, then you would have got 11500 $.
When the rate again fluctuates, you would have got 10500 pounds, so you made a net profit of 500 pounds. So if you are good at identifying which currency will increase and which will depreciate, you can make money by simply “betting” on this. This is called speculation in Finance, and it is how you can make money in Forex Trading.
Mindset before starting to learn Forex Trading
Trading is very different from what many people advertise. You don’t become a millionaire overnight, unless you start as a billionaire. It’s a business and, like any other business, it takes time and effort. If you are not ready to dedicate part of your time to grow your business, you won’t have good results with it.
Beginners Do’s and Dont’s
Before starting to learn forex trading, set yourself a goal. It should be realistic. Try to learn only some things at a time. Keep your expectations low. You must wait to learn everything. Patience is the key to success. Below are key points every novice should follow before investing in forex.
- Set your goal
- Implement what you learn
- Prepare yourself for setbacks
- Learn from your mistakes
- Take risks
- Choose right platform for trading
First of all, learn about forex trading. Wait to invest your money. Investing without knowledge will do no good to you, and eventually, you will lose your money.
Set your goal
Set a goal everyday list down all the things and complete them one by one. Give yourself reward after completing each task.
Implement what you learn
Don’t just learn make sure to implement it on your demo account. Practice will make you
Its important to be consistent in every field. Make sure to practice it daily. Avoid procrastination as it will not help you and take you in depression.
Prepare yourself for setbacks
There maybe somedays where you will not get profit and you may end up in loss. Loss is also a part of trading so prepare yourself mentally for it. Most people who are not mentally prepared for loss end up in depression.
Take Calculated Risks
Don’t play safe and too risky. Take calculated risks. For e.g if you are investing a small amount like 50$ it may not give you a good profit so if you have good amount of money and knowledge then try investing a good amount of money which has the probability of giving you a good profit.
Learn from your mistakes
Don’t curse yourself and go into depression if you made a mistake instead learn from it and don’t repeat it. Mistakes make you a
Choose right platform for trading
It is very important to choose a right platform for trading. Explore all the platforms and then choose a one which suites you the most.
Is Forex Trading easy or difficult?
It all depends on you how much effort you put into learning it. Mindset matters the most if you can sacrifice and work hard consistently. You will not fail. There is no luck. You have to give your 100 percent to succeed.
Is there any risk factor involved in Forex trading?
Like any other business, there is risk involved in Forex trading, too, which is why it is advised to start trading with your demo account first. When you learn some excellent trading strategies and have confidence in yourself, you can open an account with your money.
Is Forex trading profitable?
Yes, forex is way more profitable than you think and can make you rich. However, it can only happen if you have immense patience and determination because many people think of trading as a place where they can fetch quick money. If you are the one who thinks so, then forex trading is not your cup of tea.
Can we make a living by trading on forex?
If you have the time and dedicate your free time towards learning and perfecting these skills, then you can make more than a living.