Trading foreign exchange (forex) is indeed known as an active financial strengthening activity. Trading is different from investing, which tends to be passive. Even so, both forex trading and forex investment are considered capable of presenting promising profits. Many people have started to be interested in learning forex trading in order to increase their financial strength in the future. However, you need to know that forex is one type of investment that has a high risk. Even if you have started to learn forex trading, without deep investment experience and knowledge, trading forex can be a boomerang that attacks you and weakens your financial strength.
6 steps to learn forex trading for beginners
Although it has a high risk, learning forex trading from an early age can be a good alternative to increase knowledge and strategies in carrying out good and wise investments. One of the important skills that you must have when learning forex trading is a high level of concentration. These skills are needed considering the forex movements that keep changing every second, so you have to be really observant and thorough in learning forex trading in order to be able to do the right analysis. Apart from that, there are several steps that might help you in learning forex trading, such as the following.
- Create a demo account
In learning forex trading, it’s a good idea to immediately apply the theory you get. However, do not immediately make forex trading transactions. Therefore, you can start creating a demo account that projects a forex trading activity as your first step in learning these investment activities. You don’t have to worry about losing capital when learning to trade forex using a demo account. The reason is, you can do trading activities without having to spend a dime.
Keep in mind that this demo account is a tool for learning forex trading, it would be better if you learn about the forex transaction process rather than see the dynamics of the money market. Usually a demo account to learn forex trading has an overview of the real foreign exchange market conditions. So, you can also use the demo account to practice the intuition and analysis needed as a trader. In creating a demo account, you can contact a trusted broker.
- Know the types of trading platforms
Once you have a demo account, you can immediately start continuing your forex trading steps with real market situations. However, there is one thing that is needed to continue that step. You must first log in or register yourself on a trading platform. The demo account that you create through the broker is indeed your identity as a trader, but you must also register the account with the trading platform to continue the process of learning forex trading. Currently, there are many trading platforms available online that can be used to learn forex trading. To gain access using the platform this trade, you can again contact the broker who managed your demo account before. If you are ready to trade forex.
- Understand the right time to trade forex
Time is an essential element that you need to pay attention to when learning forex trading. As is well known, the money market continues to run 24 hours a day, 5 days a week. However, as a human being to work continuously in that period of time is impossible. Therefore, you must be able to carefully manage the appropriate and appropriate time for you to trade forex. For the time element, there are basically 4 times sessions that you need to pay attention to when learning forex trading, namely the Sydney, Tokyo, London and New York sessions.
By understanding these four sessions while learning to trade, you can determine a time scheme that suits your personality to carry out forex transactions. If you really intend to become a full-time trader, maybe you can try each session more quickly. However, in applying the time or session you must have high concentration. If you feel that the activity is too risky, you can start studying trading in your spare time, such as during office hours. You can use Traders Union for start trading forex which is regulated and authorized
- Identify the mechanism of technical indicators
Technical indicators are one of the important instruments for you to understand when learning forex trading. With an in-depth understanding of technical indicators, it will be easier for you to perform calculations or analyzes related to prices, volumes, and market interest related to foreign exchange. Technical indicators are also one of the ways used by traders to be able to map market conditions as well as predict the direction of foreign exchange price movements in the future. Trading indicators also usually already exist as a tool in various trading platforms. Even so, you still need to understand how to analyze technical indicators in depth as an important step in learning forex trading
- Study the fundamental indicators
In addition to technical indicators, there are other terms that you need to understand. That is a fundamental indicator. Fundamental indicators are also one of the references that you need to conduct analysis as a means of learning to trade forex. These fundamental indicators usually come from economic data, as well as socio-political issues that are developing in a country and can affect the movement of foreign exchange values. In studying fundamental indicators, you will do more research on the economic and social data that affect a country’s currency. The economic data that you will research will usually be strong around a country’s economic prospects, inflation, and unemployment. Basically, if a country has good economic prospects, the analysis you do will tend to lead to a strengthening of the value of a currency. However, the opposite is also true.
- Understand the risks before trading
Even though you have understood all kinds of knowledge and good steps from learning forex trading, you also need to understand what risks can come your way when you start trading forex seriously. Understanding the risks of forex trading is not based on instinct alone. There are many factors that can be analyzed to present a variety of risk projections that will be present. Risk will always exist in every trading activity, but with a deep understanding and good management, you can determine the loss tolerance limit so that you can launch a wise strategy to divert large potential losses.
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