How to be a forex trader

Forex is one of the most volatile type of investment markets and one of the most exhilarating experiences in the world. With great liquidity and immense margins, it is one of the most effective ways to make money in a market, and easily the quickest way to throw money away.

Here is a simple, three-step guide on how to become a forex trader.

Follow These Steps to Become a Forex Trader

First, you have to understand how currencies are traded. There are three critical terms to learn: Each quote is composed of two parts, the pair and the rate. Each pair signifies two different currencies. A pip is the smallest increment of a pair. All forex markets of any liquidity have a spread of some sort, and oftentimes a broker will widen them slightly to make a profit.

Global Forex Traders, Forex Demo Account Metatrader 4, Demo Forex Trading, Forex Meta Trader 4, Forex Currency Trader — Broco

This is equivalent to a stock broker charging per-trade. So in order to be profitable, you will need to recoup the spread. The second key to Forex trading is practice, practice, practice. Set one up, and mess around-watch your money evaporate. After you have played around for a couple days, open another practice account, but this time develop or use a specific trading strategy.

Pick a method and stick to it. You may or may not make money this time, but you will start to have a fuller understanding of the inner workings of the market. After a few weeks, try another strategy and get good at two or maybe three.

The third key is to start small. This is where most beginning traders lose the most money.

After you have practiced for several months, take the strategy you know best and some money you can afford to lose. It is certainly best to chose a broker based on a comparison list or based on reputable reviews.

Open a micro account, start really small, use a disciplined method, and begin trading. Know your own psychology and resist the temptation to be driven by greed or fear.

Now we recommend the beginner to read this guide to start trading. Or you can learn more about the forex market in this infographic.

Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit.

The high degree of leverage can work against you as well as for you. OptiLab Partners AB Fatburs Brunnsgata 31 28 Stockholm Sweden Email: You are using an outdated browser. Please upgrade your browser to improve your experience. World's best forex deals and strategy. Step 1, understand how currencies are traded First, you have to understand how currencies are traded.

Step 2, practice The second key to Forex trading is practice, practice, practice. Step 3, start small The third key is to start small. Sign Up Free Demo.