The world of forex is incredibly complex. Markets can turn on their heads in the blink of an eye, and events can have the most unexpected of consequences. Fast-paced, tempestuous, and volatile, the currency markets take a skilled eye to decipher them, and an even more talented brain to unravel them.
Yet they remain surprisingly accessible to those with a willingness to learn about investment opportunities. As with any academic pursuit, forex trading can be mastered by most, provided that they’re prepared to invest the time and effort into understanding them. With the correct attitude, you too could triumph.
Taking these initial steps, however, can be the hardest part of entering the world of currency trading. Many novices are entirely unaware of the myriad of resources available to them, and they have no idea of where to begin. That’s why we’ve created this handy guide to help you…
Step One: Read Books
Reading is fast becoming a lost art, but professionally published titles are still one of the best resources around for the aspiring forex trader. Written by men and women who really are experts in their field, their pages are filled with terms and tactics to help you get started, and they’ll provide a fantastic foundation for you to work from. Selling sites like Amazon have a multitude of resources for you to choose from, and many of them are available for next to nothing second-hand. Even better, you might find that there are some useful titles gathering dust in your local library, so that you don’t have to spend any money on them at all.
Step Two: Look at News Articles and Commentaries
Books are not the only place to glean useful information from. The internet is filled with news articles and commentaries that could be of use to you, and websites like Investopedia are a particularly handy resource if you find a term or two that you need elucidating. You might also want to check out any commentaries or reports on historic forex events, as these can provide a fantastic real world example of how the markets react to specific external stimuli.
Step Three: Study Economic Calendars
Following on from that last point, you might want to find a good economic calendar to use as a reference. These resources detail any organised events that may impact the forex markets, so they’re a handy way of ascertaining what sort of stimuli has an effect on currency trading. What’s more, they allow you to watch these events unravelling first hand, so that you can see from start to finish how central bank decisions and so on ought to influence your future trading.
Step Four: Look at Online Videos and YouTube Tutorials
Many people prefer a more interactive approach to learning. 21st century living has made us accustomed to having all of the information we need at our fingertips, and interactive learning sources take this one step further, by negating the need to even read the material that you’re presented with. YouTube is filled with useful tutorials for those who like to have information spelled out for them, and many brokers now offer live online sessions to allow you to interface with them as they present their research, data, and findings. This chance to talk with experts first hand can be invaluable, and is something that many fledgling traders find incredibly useful and informative.
Tweet ThisStep Five: Test Your Tactics without Trading
Most brokers will do their best to aid you in your endeavours, and another tool that they offer to help you is the chance to try your trades for a limited time without putting any money on the line. The beauty of this is that it allows you to gain practical experience without being prematurely unleashed on the markets, and many find that there’s no better way to learn than this. Even if you can’t find a suitable firm that offers such an opportunity, you can still create a replica experience for yourself, simply by studying the markets and charting whether or not the trades you would consider making pan out.
Step Six: Learn from Your Mistakes
Even when you begin trading, you’ll soon discover that your learning experience never ends. The currency markets are so complex that you’ll never see a day when you know all of their intricacies inside out, so it’s important to approach your trading with this in mind, and to see the many educational opportunities that it presents to you. Try to get into the habit of charting every move that you make, detailing what drove your decisions and how they panned out. When you’re successful, you know that your reasoning was probably sound, so you can seek to repeat such thought processes again. Where the result was less positive, there is still a chance to learn from your mistakes, and if you can identify where you went wrong, then you can avoid replicating them the next time you make a move.
Step Seven: Use Weekend Analysis
As we said above, the foreign exchange markets present an unending opportunity to learn, and weekend analysis is a fantastic method for assessing and apprehending potential market movements, particularly for less experienced traders. With the foreign exchange closed over the weekend, you have a prime window for sitting down and analysing your data, without the constant flux and change of currency values to disrupt your thought processes. As a result, you can do everything at a slightly slower pace, meaning that your decisions can be more methodical and well thought through. This provides a wonderful chance to really consider and evaluate the way that you reason, as well as an opportunity to apply the information you’ve learned to emerging trends and patterns.
Put into practice, these methods offer you the chance to gain a clear and comprehensive overview of the forex markets, with all of their complexities and their many opportunities. With such knowledge to hand, you have the power to build the most brilliant of strategies, and to turn every move you make into cold, hard cash.
Forex 101: How to Teach Yourself About Forex Trading
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