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Learning How to Trade Forex
Learning how to trade Forex starts with a basic knowledge of foreign currencies and how they are traded. Learning how to trade Forex moves on to a deeper understanding of the factors that drive the relative currency rates in various currency pairs. The next step in learning how to trade Forex is learning how price patterns repeat themselves in Forex trading just as in other markets. A knowledge of and skill in the use of technical analysis tools such as Candlestick analysis will give traders the opportunity to understand and profit from changes in the Forex market. In the end learning how to trade Forex comes down to doing the necessary homework and practicing the online trading skills necessary to capitalize on changes in Forex markets. Technical analysis tools built into trading software help traders anticipate foreign currency price changes. The wise currency market trader will supplement these “modern” tools with the tools and techniques that have served traders for centuries, Candlestick pattern formations and Candlestick trading tactics.
Learning how to trade Forex does not have to be exceedingly difficult and it does not have to all happen in a day. Traders can easily build on previous experience in learning how to trade Forex.
Familiarity with foreign currencies and previous experience trading stocks, trading options, trading commodities, and trading futures in general will give beginning Forex traders a head start. Trading tools are similar whether the job is options trading, stock trading, or Forex trading. The fact that markets repeat themselves carries over all the way from rice trading and Candlestick basics in ancient Japan to trading the Euro versus the US dollar today.
The major Forex markets are Frankfurt, London, New York, Sidney, and Tokyo. Thus foreign currency trading goes on virtually around the clock. Learning how to trade Forex includes deciding which currencies to trade, which Forex market to trade and whether to trade daytime only or engage in after hours trading. Learning how to trade Forex is learning discipline as well. Choosing a time to trade, a currency pair to trade, and limiting trading to daytime trading for starters is probably a good idea. A beginning currency trader will often engage in practice trading or simulation trading. Modern trading software will have extensive data from real market situations. Thus the new Forex trader can practice in real situations without risk of immediately wiping out his or her margin account.