How To Trade Forex

Welcome to How To Trade Forex where we will share tips and resources with you to help you trade successfully.

We will include some excellent online Forex courses run by professional traders, trading platforms and how to automate your Forex trading with forex robots as well as all the basics of how to trade.

Did you know that around $5 Trillion is traded on the Forex EACH DAY?

There are a number of ways to trade the Forex market, also known as the foreign exchange market.

Lets look into those here:

• First some basic facts about the Forex, followed by
• 4 essential things to do before you begin trading
• Finally a useful playlist of videos about how to trade

Some basic information you must know about how to trade forex

Lets look at some basic facts you need to know about how to forex trade. As you probably already know, currencies always trade in pairs. For example EUR/USD (Euro and US Dollar).

One way to trade the forex is to buy and sell currency pairs. I put that in inverted commas as you arent actually buying or selling anything! The Forex market is a speculative market. But you get my meaning when I say buy and sell.2C353 /%

In effect you are buying one currency in the pair at the same time as selling the other currency in the pair. You buy or sell the currency that appears on the left side of the pair.

You can choose to go long (buy) which means you are betting on the fact that the pairs value goes up. In other words you think the value of the Euro, in this example, as it is on the left in the pair (EUR/USD), will increase in value in relation to the US dollar.

Believe it or not, it doesnt matter where you get your information from as to what a currency may be about to do. Its all allowed in Forex trading!

You could have a conversation with someone who has insider information about the US economy and use that to your advantage with your trades.

Or you could study the economy yourself and try to gauge what is going to happen. You could also study past trends to help you predict future trends.

Or you could use specialized trading software which does all of that for you and much more.

Or you can choose to go short on a currency (sell) if you think the value of the Euro will decrease in relation to the US dollar and therefore the pairs value will go down.

Lets liken it to buying art. You could buy a painting which subsequently goes up in value so you could then sell it for a higher price than you paid for it and make yourself a profit. You buy a currency if you believe the value of that currency will go up. You sell if you think the value of that currency will go down.

The profit or loss generated on a trade is measured in what is known as pips.

Unlike traditional stock market trading, there are no limits in Forex trading.

More advanced traders also trade in what is known as derivatives like options and futures, but for now lets keep things simple and stick to the basics.

You will need a good trading platform before you can start forex trading.

How to trade Forex: 4 Vital Steps You Need To Take Before You Start Trading

1. You must choose a broker

This is your first important step. Before you begin Forex trading, it is essential to choose a broker first. Your decision regarding which broker depends on you as a  trader.

Lets liken it to buying cars some dealerships will offer you the very thing you want and some will be better for other people as we are all looking for different benefits.

There are for instance some brokers who would offer various options that would be a definite advantage for some traders, which other traders may find to be of no use to them.

So, you need to assess and evaluate all the benefits in detail that are offered by all the different brokers. You as a trader should choose the broker whose benefits you consider to be most suitable and fitting for your situation and aims in Forex trading.

2. You need to Open a Demo Trading Account

When you have made your final decision regarding choosing a broker then the next step for you as a trader is to open a demo trading account. Most brokers tend to  propose a trial period of at least 30 days for their respective trading platforms.

This gives you the trader the opportunity to trade on the provided trial platform by using play money rather than using real money.

A demo trading account will enable you to decide whether or not you are happy to trade in the broker’s trading platform by trying out the trading tools of the broker. It would be unwise for any trader to start trading with real money before deciding the comfort level of the trading platform. Heres the ideal: Learn all you can about how to trade forex and then practice with a demo account, then trade with real money.

3. The third step is to learn About Leverage

Next in how to trade forex comes the important step of learning about leverage as Forex trading is characteristically done by making use of leverage or margin trading. Margin can be a useful tool, however it can turn out to be quite dangerous too unless it is used accurately.

Forex brokers generally offer somewhere between a leverage 50:1 up to a leverage 400:1. In other words, at a leverage of 50:1 for every 1 pound or dollar etc that you put in, the broker will lend you 50. When the number is at the maximum then less money is needed for doing a massive trade. However the risks are much greater as you could lose far more. Utilising leverage should be carried out with great skill and care.

4. Step four is learn how to read charts

The fourth step in how to trade forex is to familiarize yourself with the charts, forex trading signals and the ways they work. You should understand the varied time frames and the different kinds of charts available.

For example time frames that are shorter will give you an idea about the movements of the forex market for each and every minute.

Longer time frames give you as trader a picture of the market movements over longer time periods and will demonstrate the bigger trends. Most charting software will provide charts in the form of candlesticks, lines or bars.

Finally you reach the point of making your first live trade.

Although your demo account has prepared you with many elements of technical trading you must bear strongly in mind that when you start trading with actual money then your emotions come into the picture which is where things can go wrong, unless you use a Forex robot to trade for you.

So, these are the 4 important points that are vital for you to learn about how to forex trade before you make live trades. As you can see, there is a lot you need to know, and its in your very best interests to learn as much as possible before you risk your money in live trades.

The next step in how to trade forex?

To make the learning curve much shorter and easier you can subscribe to an online forex course which will give you real insights into the best forex trading practices. You will see how pro traders forex trade and get access to their systems and methods of analyzing the markets. Find out more.

OR get involved in social trading where you can interact with successful traders, copy the best traders and network with like minded people. This social trading site also gives you online trading tutorials: Click here

Video tutorials about trading forex

This playlist is designed to help you learn how to trade the forex. Just bookmark this page (simply press control D on your keyboard) if you dont have time to watch right now:

Learn how forex robots automate the whole trading process and take out the long learning process needed for manual trading. Go here.