In international finance, forex trading continues to gain investors day by day. Making smart investments, making advantageous exchanges and much more have attracted the attention of online investors in recent years.
Although it may seem complicated at first, there are currencies and many different trading platforms to suit every investor. But forex trading doesn’t have to be confusing. By following a process step by step and the right tools anyone can trade currencies like a pro.
In this tutorial, we’ll teach you the steps to begin trading forex if you are a beginner: what is forex trading, how to find a good forex broker, creating a practice account, forex basics, studying the market and trading your first trades.
By the end, you’ll have a strong platform from which to start forex trading confidently.
How to Start Forex Trading?
Before finding out how to begin trading forex, let us start by explaining what forex is. Essentially, forex trading involves trading foreign currencies on the foreign exchange market in order to make profit off of the movement of exchange rates.
The forex market is a decentralized 24/7 marketplace that facilitates trillions of dollars in daily transactions between central banks, commercial banks, businesses, investors, and traders. Unlike the traditional market, forex has a 24/7 trading system, offering users the opportunity to access international transactions at any time of the day.
The core of forex trading is putting your bets on whether one currency will rise or fall against another. The trading pair — a base currency (quoted first) and a counter currency (quoted second) — is the currency pairs in which transactions take place.
These are the most commonly traded pairs: EUR/USD, GBP/USD, USD/JPY, AUD/USD, and USD/CHF. When they purchase or sell currencies, traders profit from exchange rate fluctuations without the possession of physical currency.
After starting Forex trading and determining your analysis strategies, users can make transactions between currencies by following the most advantageous exchange rates.
What is the General Outline of Forex Trading?
In the most basic forex terms, forex trading entails betting on the price of a currency. Each currency trade entails purchasing one currency (going long) and selling another (going short) at the same time.
For instance, when you purchase the EUR/USD pair, you purchase euros and exchange them for US dollars at the current exchange rate. You earn money by subtracting the price you put in and what you get out of the trade. In order to make a profit while trading, the status of the currencies to be transacted must be followed and market analysis must be done.
Here is an example of the most popular currencies:
Buy the EUR/USD pair if you think the euro will go up against the US dollar. You’ll make money if the euro actually appreciates against the dollar before you close the forex trade.
In contrast, you sell EUR/USD if you anticipate the strengthening of the US dollar, and you short. Here, you’ll win if the dollar goes up or the euro goes down.
The aim is to buy currencies that are moving up and sell currencies that are moving down. Forex traders use fundamental and technical indicators to try to guess the direction of exchange rates. Profits are earned through the proper forecasting of these market movements.
Forex trading is seen as an important exchange factory among investors. Not only in private banking accounts, but also you can increase your business earnings by opening a corporate forex account and make profits by making transactions between currencies.
How to Choose the Right Forex Broker?
To get started in forex trading, choosing the right forex broker is essential. The right broker will offer secure and reputable trading accounts, low spreads, high-quality education, and excellent customer service – all the ingredients for forex success.
Working with the right forex trading expert will allow you to implement the most accurate strategies and increase your profit margin. At this point, choosing a professional forex platform is an essential step.
If you’re looking for brokers, try to look for those licensed by the leading financial regulators such as the FCA, CySEC, MFSA or MiFID. Regulation is how brokers make sure to protect traders and handle money. You should also consider opening demo accounts to "probable" new platforms before investing actual money.
Other considerations include minimum deposits, accounts, leverage, payment processing, research tools, and fees.
It is useful to see how the reputation of a broker and its services can be gained through customer reviews. Identify brokers with solid reputation, stable conditions, and excellent track record.
One of the best regulated brokers out there is BlueSuisse, which gives traders extremely narrow spreads, powerful platforms like MetaTrader 4 and 5, top-of-the-line tools, and funding for all levels. Platforms like MT5, allow you to report every move with its user-friendly interface, and allow you to stay up to date by following market movements.
Being a registered name regulated by the MFSA, BlueSuisse ensures that learning forex is safe and fully transparent.
Step By Step on Setting Up a Forex Trading Account Easily
After choosing a reputable broker such as BlueSuisse, opening a forex trading account is easy. Here are the basic steps:
- Sign up using a simple web form that contains your contact information. At the end you'll need to provide identity documents such as a passport.
- Download the broker’s trading system — MetaTrader, cTrader or some other software. You can even try out demo accounts to trade at a small risk.
- Place funds into your new account through accepted methods. Minimums vary, but typically range from $200-500. Money is stored in separate bank accounts, according to the law.
- You can verify your identity through documents such as government ID. This ensures that there is no fraud, and it meets KYC requirements.
- Know the trading platform’s features, charts, indicators, and order types. Demo trading is perfect for this phase.
- Once you’re ready, you can begin trading with your live account by examining markets and making your first live trades. Don’t take things too seriously until you understand the risks.
- Keep track of trades, update documents, fund your account, and withdraw funds depending on your broker’s rules. Maintain verified details.
Installing only takes minutes online. BlueSuisse also supports several live language chats. Open your Forex trading account immediately without any paperwork.
Keys to Analyze the Forex Market
Prior to attempting live forex trading, it’s important to know how to study the market and locate a trading opportunity. Strong analysis puts you one step ahead of others because you can pinpoint what’s motivating the price of the currency and how it might be moving.
Here are some strategies for successful forex analysis:
Understand How to Do Market Analysis
Principal forex concepts such as interest rates, inflation, GDP, trade balances are all dependent on economic data. Check the calendar to keep track of indicator releases from countries and central banks. Big data surprises can lead to strong price reactions.
Study Charts for Patterns
Historical chart technicals for historical price is the foundation. Learn to recognise trends, support/resistance, candlestick formations, and cues from indicators such as MACD and RSI. These recurring patterns help determine which way a currency pair is likely to go in the future.
Stay Tuned to the Global Forex World
Geopolitical uncertainty, central bank meetings, elections - anything with uncertainty affects currency markets. Keep up to date with international news via trusted media. Any big news event that triggers massive currency price movements is often surprising and unexpected.
Consider Market Sentiment
Check interbank rates and see where the other traders are sitting. Political metrics such as the COT report shed some light on speculative positioning. If the crowd goes too bullish or bearish, a flip is in store. Vary sources of information for different views.
Form a Trading Plan
Forex trading strategies are different for each investor. Know before the time what factors, signals or strategies will trigger your entry and exit. Re-examine your strategy on the historical data to verify its truth before you put money on the line.
Be aware of profit limits and stop losses to manage risk at every trade. Forex trading is also linked to risk management and helps protect your assets.
Market research is a continuous process. The more you learn, the more likely you are to identify the right opportunity and make good forex trading decisions.
Moreover, BlueSuisse’s research reports give an advantage in analyses. Working with an experienced and professional broker like BlueSuisse provides opportunities for small startups, as well as large investors, to grow their investments.
With the right guidance, every investor can trade forex and increase their earnings in the forex market. With BlueSuisse, discover the metrics of safe forex trading and grow your small startup investments day by day by creating your analyses correctly.