Forex market is also known as forex exchange is the exchange of a one countries currency for another currency e.g. Euro to Dollar. In the past, banks, governments and big companies were the major players in the forex market. This has however changed and the forex market is slowly becoming more common among people. It is said to be the largest market.
The forex market is open 24 hours a day for traders. Forex trading is when traders predict the price of one currency against another one. If you think that the Dollar will rise against the Euro you can buy the USD/EUR and later sell it for more money. If the opposite happens then you are facing a loss.
Here is why the forex market has become so popular.
Trading is more common now more than ever and it is mostly thanks to the internet. These days Forex trading is no longer for private investors and big hedge funds only. There are millions of traders who do not have degrees in business that are trading and actually making it work. Brokers played a major role in the wide popularity the forex market is getting. They started getting people on board and they liked what they heard. People are always looking for a way to make some extra money on the side and this has become an option for many.
It is very easy to get started you just need a reliable internet connection and the money to invest. The next step is to find a trading platform or a brokerage company. The companies are so many that choosing could be a problem. These platforms are competing to get more traders and some have invested heavily in making the best trading platforms.
When you place a trade you should be ready in case the trade goes wrong. If you are too emotional about losses you cannot trade effectively. Trading needs you to maintain a clear head otherwise you risk having a very hard time including panic attacks. You should avoid trading on emotions including fear. Be confident in your trading and stay calm.
Even though you hear people say that they made a fortune from trading do not rush into anything. You might meet some losses as you go but do not give up. Being impatient can make you make a wrong move. Wait till its the right time to place a trade. Do not expect it to happen overnight.
Doing research is very important when getting into anything. It is by doing your research that you will know about what is happening in the market. You risk even being scammed if you do not know what you are doing. You can visit sites such as CMC Markets site for forex news and other helpful information.
Hiring a broker can be a good idea but make sure you know who you are hiring. There are brokerage companies that have been accused of being frauds. They lie to their clients and misguide them on trades. Some brokers are in it just for themselves so get a legit company. Also, ask for the necessary licencing documents. It is also important to stay informed so that you do not trade on the wrong information. The market is always changing and for very different reason such as politics for example.
You should create a solid plan and strategy before trading and ensure you follow it. Plan your finances well this will help you manage the trading money. Most trading platforms will warn you not to use the money you are not ready to lose.
● Demo accounts
You should sign up to a platform that offers a demo account to help you practice before trading with real money. You will find it easier when you start trading. Most demo accounts are free and can be very helpful. Forex trading can be very risky a slight change in price can cause you a great loss. Forex is traded on a margin. It is said to be riskier than other forms of trade.