Want to Learn Forex Trading? Follow these 6 Steps
Trading foreign exchange (forex) is indeed known as an active financial strengthening activity. Tradingis different from investing whose activities tend to be passive. Even so, both trading forex and investing in forex are considered capable of bringing promising profits.
Many people have started to be interested in learningtradingforex in order to increase their financial strength in the future. However, you need to know that forex is a type of investment that has a high risk. Even though you have started learning to trade forex, without in-depth experience and knowledge of investing, trading forex can backfire against you and weaken the financial strength you have.
6 steps to learn forex trading for beginners
Even though it has a high risk, learning to trade forex from an early age can be a good alternative to increase knowledge and strategies for carrying out a good and wise investment. One of the skills that is important for you to have when learning to trade forex is a high level of concentration. This skill is needed considering that forex movements are constantly changing every second, so you have to be really observant and thorough in learningtradingforex so that you can do the right analysis. Beyond that, there are also a number of steps that might help you in learningtradingforex, as follows.
1. Create a demo account
In learning forex trading, it's a good idea to immediately apply the theory you get. However, don't immediately make atradingforex transaction. Therefore, you can start creating a demo account that projects a forex trading activity as your first step in learning about this investment activity. You don't need to worry about losing your capital when you learn to trade forex using a demo account. The reason is, you can do trading activities without having to spend a penny.
Keep in mind that this demo account is a learning tool fortradingforex, it would be better if you learn about the forex transaction process rather than watching the dynamics of the money market. Usually a demo account for learningtradingforex has an overview of the real foreign exchange market conditions. So, you can also use the demo account to train the intuition and analysis needed as a trader. In creating a demo account, you can contact a trusted broker.
2. Get to know the types of trading platforms
After you have a demo account, you can immediately begin to continue your learningtradingforex with real market situations. However, there is one thing that is required to proceed with that step. You must first log in or register yourself on a trading platform. The demo account that you create through a broker is indeed your identity as a trader, but you also have to register the account on the trading platform to continue the learning process of forex trading. Currently, there are lots of trading platforms available online that can be used to learn forex trading. To get access to using thistradingplatform, you can again contact the broker who managed your demo account before. If you are good at trading forex, you can easily and quickly trade using OCTO Mobile.
3. Understand the right time fortradingforex
Time is an essential element that you need to pay attention to when learningtradingforex. As is well known, the money market continues to operate 24 hours a day, 5 days a week. However, as a human being to continue working in that period of time is impossible. Therefore, you must be able to carefully set the time that is suitable and appropriate for you to do forex trading. For the time element, basically there are 4 time sessions that you need to pay attention to when learning to trade forex, namely the Sydney, Tokyo, London and New York sessions.
By understanding these four sessions when learning to trade, you can determine a time scheme that suits your personality to make forex transactions. If you really intend to become a full-time trader, maybe you can try each session more quickly. However, in applying the time or session you must have high concentration. If you feel that this activity is too risky, you can start studying trading in your free time, such as when you come home from work.
4. Get to know the mechanics of technical indicators
Technical indicators are one of the instruments that are important for you to understand when learning to trade forex. With an in-depth understanding of technical indicators, it will be easier for you to make calculations or analyzes related to price, volume, and market interest related to foreign exchange. Technical indicators are also a method used by traders to be able to map market conditions as well as predict the direction of foreign exchange price movements in the future. Thetradingindicator usually already exists as a tool in various trading platforms. Even so, you still need to understand how to analyze technical indicators in depth as one of the important steps in learning to trade forex
5. Study the fundamental indicators
Apart from technical indicators, there are also other terms that you need to understand. That is a fundamental indicator. Fundamental indicators are also one of the references that you need to do analysis as a learning tool for forex trading. These fundamental indicators usually come from economic data, as well as socio-political issues that are currently developing in a country and can influence foreign exchange rate movements. In studying fundamental indicators, you will be doing more research on the economic and social data that affect a country's currency. The economic data that you will research will usually be based on a country's economic prospects, inflation, or the unemployment rate. Fundamentally, if a country has good economic prospects, the analysis you carry out will tend to lead to the strengthening of a currency's value. However, it also happens the other way around.
6. Understand the risks before trading
Even though you have understood all kinds of knowledge and good steps from learning to trade forex, you also need to understand what risks can come to you when you start trading forex seriously. This understanding of the risks of trading forex is not just based on instinct.
There are many factors that can be analyzed to present a variety of projected risks that will be present. Risk will always exist in every trading activity, but with a deep understanding and good management, you can set a tolerance limit for losses or losses so that you can implement a wise strategy to divert large potential losses.