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The Art of Forex Trading

How to get started trading Forex 

Forex trading has grown massively in popularity in recent years. The reasons for this are obvious. Access to the markets has become significantly easier, on the one hand through extensive broker offers and on the other through the diversity of information. It is also a relief that the start in active Forex trading no longer requires huge bank accounts. Today, anyone with a few hundred dollars can successfully follow forex trading. However, those who are interested in forex trading and have perhaps already obtained initial information will at some point, like all prospective traders, face the same problem.

How does a prospective trader actually start to learn forex trading? If you think you can earn a few thousand dollars at once, you will inevitably end up with a total loss. One thing should be said right at the beginning: Forex trading is a demanding business, which requires a lot of training and willingness to learn, but the following article will give you some help on how to become a successful forex-trader.

The Basics - Vocabulary

In order to become profitable in Forex trading, it is imperative to deal with the absolute basics, even if they are so banal. First, learn the basics and become familiar with the vocabulary of exchange trading. If you don't even speak the same language, how will you ever be able to place successful trades?

Technical Analysis and Dow Theory 

Once you have learned the vocabulary of the stock market and Forex trading you can go one step further and learn the principles of the markets. Every market and every asset is always determined by the economic principle of supply and demand. Be sure to familiarize yourself with it. Economic principles are indispensable, only in this way will you understand why prices fall or rise.

Learn and understand Charles Dow's theory: Charles Dow was not only co-founder of the well-known Dow Jones Industrial average, he is also the creator of the Dow theory. His theory describes the principles of chart technique and technical analysis and is still valid today.

You should also learn trend lines, support and resistance as well as the most common indicators. There are lots of books and video material to help you learn. These factors will help you understand price trends and to analyze the markets and detailed analysis is essential to make trade decisions.

The broker and the demo account 

As soon as you have learned the craft, you start looking for a trustworthy broker. The broker is your link to the world's financial markets. You should therefore attach great importance to it. The choice of a broker is a decision that can significantly influence your success. It is essential that you compare different brokers. The most important selection criteria should be deposit protection, customer service and fee structure.

Most brokers offer the opportunity to open an unlimited and free demo account. This chance should be used definitely. Train daily with a demo account, because forex trading can only be learned by simply doing it. So you can trade without risk and refine your skills. Develop your own personal strategy in demo trading and test it at least on 300 trades. Once you have found a successful strategy and traded it profitably in the demo account, you can start your first trade with real money.

Risk and money management 

It is a fact that over 90% of all private traders lose money. Often the only reason is a lack of risk and money management. You always have to keep your risk under control. If you never risk more than 1% of your account per trade, you will keep your losses low.

All in all... 

Learning Forex trading is possible it only requires a high level of commitment and hard work. Every prospective forex trader should have expanded his knowledge to the smallest detail and pursue a strict risk and money management. Coupled with a good broker and experience trading a demo account, really anyone can learn forex trading. The road to successful trading is long, but it will be worth it.
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9 comments:

  1. I think the biggest advantage is not needing a lot of money to start! Love your honesty about this topic! So much to learn about, and mostly starting this as a hobby, which not a lot of time, it's very difficult and yes, you can only truly learn by just practicing. Thank you!

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    1. Thank you for taking the time to read and provide your feedback on the article.

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  2. Hey, was wondering, this nice tip about keeping the risk under control by just putting the 1 % is it something you personally suggest, or a generic tip everybody say or known technique? I think is very helpful to set boundaries from the beginning, like it a lot. Great article, good job!

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    1. Louis, it is a personal suggestion, until you feel fully comfortable.

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  3. Hello, I'm just starting, but i have been reading few of your articles, and I'm very grateful for sharing your knowledge. Wanted to ask if you would suggest to someone new to start with forex? Thank you!

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  4. I had no idea Forex trading was a thing. I might actually be able to start trading now because of this new information. Your article outlines and describes the system well.

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  5. There is tons of hype around Forex trading; although, I've always been somewhat confused about the topic because at the end of the day it is trading or investing in other countries currency correct? So does that mean one should follow countries as a whole and if they have sound government invest in their currency?

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  6. Nice features! Looking forward to test that demo account. Still have lots of homework to do to catch up with all the articles here, thank you for letting me in to this community, hope to improve and help others one day!

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  7. You guys are great! Really good tips, I do apply putting a controlled amount, but never thought about an specific amount of 1% but I think that creating a system or structure is the best way to succeed. Starting that demo account already ;)!

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