Forex trading used to be the exclusive business of the banks where the banks make millions of dollars by just exchanging the currencies of different countries. But the internet has changed all that and now you can trade Forex even in your own bedroom with as little as $100 start up capital. While it is possible to start Forex trading with $100, it is however not advisable for profit sake. In this article, I will be endeavor to address some of the mysteries about Forex trading for beginners.
Is Forex trading still profitable for ordinary individual? How much can you possibly earn trading Forex on part time or as full time trader? What are the risks involved in Forex trading that you need to be aware of. Can average person start a Forex trading business with basic knowledge about money market and financial management? All these and more will be answered in no particular order in this article. So, follow through to the end and don’t forget to drop a comment.
What Exactly Is Forex Trading?
Forex trading can be defined as the online/internet currency exchange trade or act of simultaneously buying and selling currencies of different countries online using internet trading platforms. Forex stands for Foreign Exchange so, Forex Trading simply means Foreign exchange trading or trading on foreign currency by its exchange rate. Since Forex trading involves the disparities in foreign exchange rates, making profit or loss in Forex trade is usually determined by the economic state of different countries at a time.
Since the economy of different countries is not static in relation to one another at any point in time, the Forex market is never fixed or stagnant at any point in time as well. It is a volatile market that is constantly changing and are never accurately predicted. This is where the profit or loss is made. If the currency goes up in your favor, you make profit, it it goes down against you, you make loss.
Understanding the Forex Market
To understand the Forex market and be good at it, you have to avail yourself to serious training in Forex trading! You must acquire the technical knowledge required in Forex trading. You must have enough time and willingness to study this ever changing price market over a period of time and be up to date with the local and foreign news as global trends have a tendency to determine the direction the prices of the currency goes, either up or down.
To assist you in the learning process, it is important to use a demo account for practice. Almost all the Forex trading platforms have demo accounts were you can practice Forex trading in what looks like real time trading. The demo accounts are loaded with virtual money and in real time mode. The only difference is that you neither make profit nor loss in demo trading.
You need to continue to practice with the Forex demo account until you become very proficient. You must be good with the virtual trade before you ever attempt with real money because once you are up with the real money, there is no going back, its either profit or loss. From then, it becomes investment that must be handled very seriously. Your investment in Forex trading is not something you joke with, you need to be up to date with knowledge and information. You must be into it and do research regularly.
How To Get Started With Your Forex Trade
Before you proceed to open an account with any Forex Broker, you must understand that not all Forex Brokers are genuine. Make a thorough research before settling with any trading platform with real time investment. I will advice you use the big and established Forex trading platforms only.
Go to the website of your desired Forex Brokers and open account. Forex Broker or the Forex trading platforms is the medium through which currency is traded online.
Fund Your Forex Account
Before you start live Forex trade, you must fund your account. Funding can be done through direct deposit or by using your credit/debit cards.
Have A Domiciliary Account
This is very important for effective transaction and to enable you make a withdrawal of your profit when there is any. Some use other currency medium like the eCurrencies but at the end, it will still get to Domiciliary accounts. The Dom account is used for cashing or depositing funds into your Forex trading account.
Fast Internet Connection
You need a very fast and reliable internet connection to be able to trade Forex in Nigeria or elsewhere. Without this, it will be difficult for you to make profit because your internet has to be fast and reliable to enable you take quick actions.
High Performing Laptop
This is very necessary for efficiency and accurate performance in live market. Do not make the mistake of using a wacky laptop for Forex trading. Most times, the losses people make is as a result of inefficient trading devices.
The profit you make depends on your trading skills. Yes, people are still making profit in Forex trading in Nigeria and will continue to make profit as long as currency remain in use. In fact, nothing has changed and will probably change forever.
Start a Forex Trade with little capital is never a good idea. You need to invest something substantial to make reasonable profit. A serious trader trades with thousands of dollars. I have seen people make hundreds of thousands of dollars with Forex trade and you too can.