How to Make Money Online Using Forex
Forex trading is about buying and selling of foreign currencies. Most people think that forex trading is meant for corporates and banks believing that it is a complicated task. But in contrast forex trading is one of the easiest ways to make money online. The most important thing to know about forex trading is: buy when the market depreciates and sell when the market appreciates. Forex trading involves trading of paired currencies such as EUR/USD, EUR/JPY, and USD/RAND among others. This blog focuses on the basics of forex trading for newbies.
The first thing you need to do is open an online forex trading account. The account can be opened using one of the online forex trading agencies such as eToro. After signing up to the account, you will need to add money to your forex trading account and start trading.
You can use PayPal, Credit card or bank wire transfer to deposit money to your account. Before engaging in any trading make sure you get enough information to avoid losing all the money. You can use practice trading accounts where you trade using virtual money but use real features such as price quotes and charts. The platform allows you to get an overlook of how real trading takes place.
After signing into an online trading account, you need to learn how to manage your money.
Every trader has losing trades, but once you go broke, you put yourself in a position where you can no longer have winning trades. Avoid focusing on having a profitable trading strategy entirely through trading but have a solid money management mind and be disciplined throughout your trading to increase your chances of profitable trading. You should ensure that you don’t risk more than 3% of your trading capital per trade and ensure you have enough money for at least 40 trades.
Although forex trading may seem like a one-man show, you will need some reliable forex friends and partners to talk about the market conditions. Your trading friends will remind you of your trades, help you understand the system’s terminologies, guide you on the best trades and help avoid massive losses.
You can also start a trading blog so that other members can comment and offer relevant advice. Don’t be afraid to enquire as a beginner, because everyone in that platform was once a beginner and you will meet other beginners like you in the forum.
Forex trading is a fun, exciting and dynamic experience but does not allow your emotions guide your judgment. If you want to be successful in the venture, you should view forex trading as a business and not a hobby. Remember that your trading capital is used to make you money and sometimes cause you money.
Avoid losing your rationality since you will end up with more losses than profits. Do not make decisions based on previous losses but in turn, analyze the next trade critically to avoid massive losses.Try to determine situations realistically from the start. Determine an attainable percentage of winning trades considering your strategy and experience.
Use the stop loss strategy to predetermine your risk down to the pip. A stop loss forces you to think about when the trade you are about to put on would be considered a failure. The tips outlined above will aid you in your trading adventure and hence increase your profit in online forex trading.