Trading currency online is very risky and not necessarily a money making opportunity. Even professional traders lose money every so often. Luckily there is lots of help online. You are able to easily teach yourself how to trade currency in the forex market and practice if you wish to before you understand how it works.
There are many websites that will help you learn to trade currency, give you daily tips, advice and trades and may keep you updated on the news in financial markets.
Never invest money in the currency market that you cannot afford to lose. Also be sure to fully understand the market and learn how it works before you trade with real money. You can use a practice account for months to learn the ropes.
If the currency market was not profitable, then large financial companies and savvy investors such as George Soros would not invest in them. Learn how to invest wisely to protect your money.
Learn How To Trade Currency
There are many things that can be done to learn how to trade currency online. I would recommend starting out with free online guides to give you a general overview of the currency market and to learn the terminology. Many people think that trading currency is similar to trading stocks in the stock market. It is actually very different and can be much riskier.
You’ll find websites that will guide you through trading the forex market step-by-step in clear to see tutorials. You can read through them as many times as you need to.
You can even join forum groups to ask questions. Remember, there is no such thing as a dumb question, so ask as many as you need to . The currency market is very volalite, you do not want to risk your hard earned dollars on something that you don’t understand, or you could lose your money quickly.
You will need to learn the both types of trading, fundamental trading and technical trading. It is good to have a general understanding of both so that you can look for trends in the market. Technical traders depend on chart patterns and the probability of the direction of the currency. Fundamental traders base their trading on market news and financial policies that effect the value of currencies worldwide.
You will want to understand charts, choose time frames, read indicators such as bollinger bands, stochastics, relative strength and MACD. You will also want to understand how market news affects the currencies. For example when the stock market goes up, the dollar goes down.
The United States Dollar USD, Japanese Yen JPY, European Euro EUR, British Pound GBP, New Zealand Kiwi NZD and Swiss Franc CHF are most commonly traded, but you can invest in almost any currency worldwide if you have a good forex broker. The currency pair that you trade is very important. It is best to trade a pair that has a lot of movement and during a time of day that most traders are actively trading. On the east coast it is best to trade from about 9:00pm to 3:00am Sunday night through Friday morning. For west coast traders it is best to trade between 12 midnight to 6:00am Monday to Friday. Do not trade after 9:00am on Fridays.
Open a practice account with a major forex broker. It is best to go with a broker that is well known because there are many forex scams available and you don’t want to be taken before you even get started. mYou can open a practice account free and get started trading. You need to trade with your practice account for three to four months before attempting to trade with a regular account and real money.
You will be able to get a feel for how things work in the currency market, but you must also be aware that your practice account starts out with $50,000 dollars and most likely you will not be able to start out with that kind of cash. Because of the high amount of capitalization, you will most likely be more successful in your practice account than you may be in your actual forex trading account.
This can also provide you with some time to save up enough money to open a trading account and fund it. Although you are able to open a free account with as little as $250, you should start out with no less than $1,000 dollar and most traders would suggest at least $5,000 to begin trading.
You probably want to get started trading currency quickly because you’ve heard how profitable it is, but have you also heard how risky it is. Don’t jump in too quickly. You can make money in the currency market, however, you can’t do it by luck. Educate yourself first and then open a margin account with a reputable broker. You will be able to leverage you money. For example a typical leverage rate is 1:100 which means that you will be able to buy one lot of 10,000 in currency for every $100 you’ve in your account. $ 100 can go quickly if your currency goes in the wrong direction so be sure you have more money in your account or your currency will be sold out.
Seasoned traders always plan their trade and then trade their plan. Don’t let your emotions or feelings get the best of you. Use charts and indicators to reinforce your trading style.
Forex Trading Software
Most professional traders use high tech software to alarm them of trading opportunities or set ups. Luckily you will discover an array of software online that is easy to use and will help you be a profitable currency trader. It’s not necessary for you to purchase software immediately or to spend lots of money on it. Just teach me to trade first and then buy software that will fit your trading style. It is possible to find advice from other forex traders online on forums to choose the Forex BulletProof software that meets your needs.