If an individual is really interested in making a career of forex trading and is eager to learn forex trading, but the ‘teach me to trade’ request made to a professional or friend in forex trading is politely refused or ignored, they can turn to material that is available online, in bookstores, and can learn by themselves. Although Learning to trade forex is better with a guide and teacher, an individual can learn forex basics from available material, and then get some hands on experience with forex trading systems. There are many websites, Articles, and online tips available on the basics of forex trading, Technical Analysis, Fundamental Analysis, market trends, and terms used in forex trading.
The global forex market is the largest market in the world. With 3.2 trillion US dollars in daily turnover, the forex market makes the combined turnover of the world’s stocks and bonds market look very small. Earlier there were only big players like national and multi national banks that traded in forex. But the last few years has seen hordes of individuals picking up the opportunity to trade in forex, part time and full time as a career. There are numerous reasons for the popularity and spread of forex trading, but one of the most important is the available leverage, the high liquidity available twenty-four hours a day and the low dealing and trading costs associated with forex trading. Learning to trade forex is a must for an individual interested in forex trading and with the necessary knowledge of market functions, can benefit from the advantages.
If you ask someone to ‘teach me to trade’ or are Learning to trade forex by yourself, you should ask about and learn about Margin Trading, Base Currencies and Variable Currencies, dealing spreads without commissions, spot and forward trading, interest rate differentials, and stop loss. Forex is generally traded on margins and is called Margin Trading. A small deposit can be used to control much larger forex positions in the market. For trading the main currencies, some banks and forex trading firms require a one percent margin deposit. This means that to trade one million USD, an individual needs to deposit just 10,000 USD by way of margin and security. While trading, an individual should always trade with a combination of 2 currencies. An example would be buying dollars and selling euros, or buying euros and selling Japanese yen.
In forex trading, there is a long and a short position to a trade, which means that an individual is speculating on one of the currencies gaining in relation to another. These are just some of the basics that an individual needs to learn and understand, besides the technical and fundamental analysis. Technical Analysis tries to forecast movements of price by analyzing previous market data, such as price trends, open interest, volumes, etc. Technical analysis is based on the principal that history repeats itself and it does not result in perfect predictions. Fundamental analysis mainly relies on the political, economic, and social forces that drive the supply and demand trends of currencies. Government and bank policies, natural disasters and social stability, and overall economic trends are factors that influence fundamental analysis. All this knowledge and information is an essential part of Learning to trade forex, and an individual must acquire in-depth knowledge before venturing into forex trading.