Foreign exchange (Forex) trading is the newest way for new traders to make money. Some of them see this as a chance to trade from home and make a living as Forex Home Traders. The foreign exchange market, also called "Forex," is where different countries' currencies are traded. Only in the last couple of years have private traders been able to trade on this very liquid market online.
Each currency has a three-letter code that stands for the country whose currency is being traded. For example, JPY stands for the Japanese yen and USD stands for the US dollar. So, you'll notice that these currencies are always written as USD/JPY.
These trades are done through a Forex broker. To get your own online trading account, you must sign up with a Forex broker. Sign up for a "Demo" trading account first, where you can trade currencies in a simulated environment without using any of your own money in "real time." This type of account is great for coming up with your own trading strategy and getting a feel for the markets. It also gets you ready to trade with your own money in a "Live" account. Warning! There is a big difference between trading "cyber money" and trading your own money "Real time," so the level of discomfort when trading in "Demo" mode is very different from when trading "Live." Sign up for "Demo" accounts with different brokers and try out their online trading software or platforms. It's in your best interest to start trading with the software you're most comfortable with.
Pay close attention to the following: When you trade on the Forex market, you can lose some or all of your money. This market moves very quickly and is sometimes very risky! - Before you start actively trading on the market, you should take at least a full-fledged Forex trading course and try to find an experienced Forex trader you can use as a mentor. When the market goes against you in a trade, it's not easy to lose a lot of money. You have to be mentally strong to handle your losses and want to learn from your mistakes.
Make sure that the broker or Forex company you choose to trade with is licenced to do business in Forex. In the United States, strict new laws and rules are being put in place for US citizens who want to trade Forex. If you are looking for a Forex broker on the internet, make sure to read the "fine print" on their brochure, proposal, or website. This will help you make sure that your company or broker is legal.
Make sure you've done your research before you make a trade. Have you done a fundamental analysis of the markets? Look at your economic calendar and see what other countries are doing. Will there be news about the currency you want to trade that will affect it? Have you decided where you will enter and leave? Set your stop loss. Don't forget! If you don't get out of your trade in time and the market goes against you, it could be a disaster.
Remember that preparing yourself well before making a Forex trade can only help your own wallet, so learn as much as you can and enjoy Forex Trading.
