Advice For A Forex Currency Trading Beginner

If you’re a forex currency trading beginner, it’s wise to test the waters of trading rather cautiously. If you don’t first do your homework, it can have disastrous effects. Spend some time doing the preparatory work and you might well end up a very successful trader.

First of all, you should get yourself a good training course. It can be either on the Internet, printed or on CD. You will find numerous courses for sale on the Internet. In the trading forums, you will also be able to pick up a wealth of free information. There are also some very good trading blogs out there.

Study the course thoroughly. Make sure you know what a fundamental indicator and a technical indicator is. Learn how to use the various indicators in your trading decisions. It’s virtually impossible to become a good trader without using some sort of indicator to guide you.

A forex currency trading beginner also have to master the use of charts. Whether these are candlesticks, line charts, point charts or bar charts, is not so important. The important thing is to be able to look at a chart and to immediately know what it tells you.

Something else you should study is the section about trading systems. A trading system is simply a set of rules that guide your trading activities. It tells you when to enter a trade, when to exit, how much to risk on one trade, how many open trades to have at any given moment and a host of similar things.

At this stage, you should make a decision about what you’re going to trade. Don’t try to become an expert on all currencies. Choose one or two and get to know them thoroughly. Examples are the Euro/USD and the USD/CHF. Over time you will become very knowledgeable about the particular market you’re trading in.

Now you should be ready to open a demo trading account at an online brokerage. This is an excellent opportunity to test the theoretical knowledge that you have gained under practical circumstances. Everything is the same as with a real trade, except that you won’t be trading with real money. Trade like this for a few weeks. Soon you will gain more confidence and start to make regular profits. As a forex currency trading beginner, you should never proceed to live trading before you can trade profitably on the demo account.