Forex Trading For Dummies
How to start trading Forex
Forex for beginners
Forex strategies for beginners
The best Forex strategies for beginners are implemented within a systematic approach. The main principle is not to violate the established rules. An untimely closed or missed trade often causes the loss of a large number of funds. Everyone is tempted to trade currencies. Experienced traders and newbies are faced with this problem all the time. The market tempts the human psyche with various offers and options every minute. The only way to avoid mistakes (not to lose funds) is to strictly follow the rules and recommendations of the chosen strategy.
Forex trading for beginners
All Forex trading for beginners comes down to finding answers to questions such as: “When will the price start to rise or fall?”, “When is it more profitable to buy or sell a currency?” and the like. This part of the job is considered the most difficult. Typically, one or more methods are used to find solutions. All of them are combined into a whole science – this is “Technical Analysis”. The developed methods are reduced to the analysis of the quotes chart by calculating the values of individual indicators. To get the most accurate forecast results, Technical analysis is combined with the Fundamental analysis (macroeconomic indicators).
Forex lessons for beginners
Every potential trader can follow two paths. The first one is to use free Forex lessons for beginners. The second is to purchase a paid course from a popular trainer. Each of the options has its own advantages and disadvantages. The information required for the first successful steps as a currency trader is guaranteed to be freely available.
It makes sense to invest in training after gaining some experience and developing practical skills. By this time, you will have a clear understanding of which course is worth paying for. You will also understand why this should be done right now, and not in a year.
Forex – how to start making money
How to start making money on Forex if you haven’t dealt with currency before? Very simple. The main thing is to grasp the essence of what is happening so that new knowledge is superimposed on the correct basis. Imagine you have a box of chocolate. Now it costs 1,000 rubles. There are two ways to make money on this product. Option one is to wait until the price rises to 1200 and sell the chocolate. The difference between the buy and sell price (200 rubles) is the trader’s profit.
The second option is to sell a box of chocolate for 1000 rubles. In this case, you must be sure that the goods will drop in price, say, up to 800 rubles. If the forecast comes true, it will be possible to buy the box back at a lower price. Profit is also generated by the difference in the selling and buying prices.
Forex is based on the principle of price formation for a specific currency. The very concept of “currency price” for a selected pair, for example, euro/dollar, means the number of dollars for which one euro will be sold. For example, a price of 2 means that for one euro they give 2 dollars. In a currency pair on Forex (euro/dollar or any other), the first currency is always evaluated. In fact, if the price dropped to 1.5, for our pair this means that the euro has fallen in price and now they are giving one and a half dollars for it. If the price rises to 2.5, it means that the euro has risen in price and now they give two and a half dollars for it. Remember – when working with currency pairs on Forex, all operations are carried out with the first currency.
Forex trading psychology
The psychology of Forex trading helps the trader to fight the main enemies. They all live in our heads. Greed is Danger # 1. Everything is good here in moderation. If a trader is greedy too little, he is missing out on many opportunities to make money. Profitable deals remain, but their number and volumes are gradually decreasing. When greed takes over, the number of unnecessarily risky trades increases dramatically. The result of uncontrolled behavior is a partial drain of the deposit or complete ruin. The best way to defeat greed and other emotions are to learn how to control and suppress them.
Plan and statistics. Forex market for beginners
A trading plan and statistics in the Forex market for beginners help market participants to improve the process of working on the exchange. Many traders do not analyze what is happening in the market and do it completely in vain. Write down the emotions that overwhelmed you at the close of each trade. Draw conclusions. Why did the situation develop in one way or another? Only this approach will allow you to give an objective assessment of the market situation and your actions. Record everything that happens in great detail. This will allow you to draw the right conclusions and achieve impressive results.
Qualities of a novice trader
The main quality of a beginner trader is the right emotional attitude. Prepare to learn a lot in the first few months. Really a lot. At the beginning of the journey, you need to read professional literature, practice on a demo account, study the rules of money management. In the first 6-12 months, you shouldn’t expect a good profit. It’s really not easy, but the effort will definitely pay off. You will begin to receive an amount equivalent to the average salary in your city in 2-4 months per month. The first serious victories will come later, but they will certainly be there.
Practically first steps
The first practical steps in Forex begin with responsibility for the result. Only you are responsible for the profits and losses incurred. The market, friends, family, relatives, and even an experienced trader-mentor have nothing to do with it. Define the main strategic goals and start moving towards them. Break your mission down into intermediate tasks. Set adequate deadlines for their implementation. Move towards the goal and constantly analyze what is happening. Don’t rush to make a million or open more positions. It is better to make one deal a day, but understand the true reasons for what is happening.
Who is intraday trading suitable for?
As in any other business, success depends entirely on the qualities of a trader. It requires composure, concentration, high-stress resistance, the ability to work at an extremely fast pace and not react to short-term setbacks. Unlike many other strategies, intraday trading does not take patience, and for many traders who do not want to wait long for the results of their work, this can be a very tangible advantage.
In day trading, it is advisable to adhere to the following rules:
- Trade for a maximum of 2 hours a day.
- Intraday trading must be at the same time.
- Limit yourself in the number of trades per day.
- Set achievable goals.
- Stop trading in any unclear situation.
- Stop trading after several unsuccessful trades in a row.
- Set a loss limit for yourself for a certain time period (for example, for a day or for a week, maybe for a month).
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