Becoming a Forex Trader
Forex trading aims, just like any other form of market speculation, to buy a currency at one price and sell it at higher price or selling a currency at one price, and buying it at a lower price in order to make a profit. The price of one currency is, and will always be, shown in another currency, which is something that may arise some confusion. If the exchange rate between GPB (British pound) and USD (U.S. Dollar) is exactly 2 (For example), then the value for the British pount, in Forex trading terms would be represented as a price of 2.0000 for the Forex pair GBP/USD.
So, if you wish to become a Forex trader, pay attention to these words.
Forex puts currencies into pairs to show the exchange rate between the two currencies, displaying the price of the first currency in relation to the second currency. The most commonly traded Forex pairs, also known as ‘major’ pairs are EUR/USD, USD/JPY and EUR/GBP, but it is normal to trade many exotic or minor currencies, like the Mexican peso (MXN), the Norwegian krone (NOK) or the POlish zloty (PLN). The trading spread is a little bit wider in those currencies as the market is less liquid and they are not so frequently traded.
If you want to become Forex trader that is successful, the first thing you should do, and maybe the most important, is to take it seriously. Remember you are devoting your money into this. Traders who are getting into the Forex market for the first time will have to start from square one. The good thing is they aren’t alone, the Fx market has so many free learning tools and resources available to help them out.
To ensure that the money you’re investing in will be sent safely, and if you want to have a jurisdiction to appeal to in the event of a bankruptcy, you’ll want to find a large market maker that is regulated in at least one or two major countries. Why? Well, the larger the market maker, the more resources it can put towards making sure that its trading platforms and servers remain stable and do not crash when the market becomes very active. Today there are many Forex brokers, each one offering customer support, and a vast number of employees, allowing its users place a trade over the phone without worrying about getting busy signals.
Anyone who’s starting to become a Forex trader should know that, by any means, they should never trade impulsively, they need to be able to justify their trades, with this said, always remember to do research. The FX market is, primarily, a technically driven market. After having a solid foundation in FX trading, remember to keep yourself up to date on daily fundamental and technical developments in the Forex market. There is a vast variety of free Forex-specific research websites, each one can be found easily on the internet.