In an increasingly uncertain world, with traditional global markets in flux and the enduring threat of Coronavirus causing chaos in traditional stocks and shares trading, more and more people are starting to look for alternative forms of investment – in particular, the foreign money exchange markets.
What is Forex trading?
Before beginning to discuss how to get started in Forex trading, it is perhaps best to consider exactly what the term means. Foreign exchange trading (Forex or FX for short) is a relatively new form of investing, but affects everything from personal investment to the price of goods in our domestic markets. When global corporations buy and sell goods around the world they are subject to the value of different currencies in different countries. For example, if a company operating in the US buys goods from a supplier in China, they will find greater or lesser value depending on the fluctuations in price between the dollar and the yen. Similarly, a holidaymaker traveling from the US to Europe will also be subject to foreign exchanges and find their money will go further if the dollar is stronger against the euro.
How to get started in Forex trading
Due to the global nature of foreign currency trading (and the fact that as one market closes, another opens), it is possible to trade around the clock, 24 hours a day, five and a half days a week. The major financial capitals of London, Tokyo, New York, Zurich, Frankfurt, Hong Kong, Singapore, Sydney and Paris mean trading never stops during the working week. Coupled with the considerable advancements in technology, the internet and mobile communications, investing in Forex is possible for investors from almost anywhere.
However, just being connected is not enough to guarantee you will make the best decisions. Here are a few tips for getting started in Forex trading.
Find the right investment broker: Finding the right broker is crucial if you are to make the most from your investments. Ideally, you should be looking for a company with the best forex signals – one that is constantly monitoring markets to keep you updated in real-time on opportunities (and equally, on impending risks).
Start slow and build up: Just like any other type of investment – whether that be in property or stocks and shares etc – experience is key to making the right decisions. Start slowly, learn from your (almost inevitable) mistakes and build your confidence. Any new skill takes time to learn and money exchange trading is no different.
Work to realistic goals: Accept that you will make mistakes and that not every investment will result in a payout. No plan or strategy will guarantee you 100% success, 100% of the time. It is important to keep your goals realistic to avoid becoming disillusioned.
Monitor, analyze and learn from every decision you make: Once you accept that mistakes are inevitable, you should keep a journal of how and why you made decisions in the past. Failures are equally as important as successes (if not more important). Keep a record of the investments you make so you can look back and see what inspired you to make those choices.