Trading in the foreign currency exchange market is one of the many ways for people to double or triple their money. The highly fluctuating market makes it possible for investors to earn huge gains in very little time. However, this can also make it similarly possible to lose most or even all the investment in just one hour or few minutes. That is why extreme care must be observed, especially with regards to investing in and selling the appropriate currency at the right time. If you want to give this a try, then it is best to well-equip yourself on the basics of forex trading, as well as learn more tips and strategies on forex trading for beginners.
One of the many things that you need to know is to learn some of the forex trading terminologies. Some of the important terms are ask, bid, bid/ask spread, leverage, margin, pip, stop-loss order, stop-entry order, market order, volatility, margin, resistance and support levels, just to name some. The word ‘ask’ refers to the price of the currency that a broker is willing to sell, while the word ‘bid’ is the price where the broker is willing to buy. Spread is the difference between the bid and the ask prices. These are very common terms that every trader should know.
Other than the terminology, you should also learn how to read different trading charts, including how to analyze these charts to your own advantage. There are many different trading charts for you to use for your analysis; such as line charts, bar charts, candlestick chart or Renko charts which is shown below:
Each type of chart provides essential information regarding the market behaviour and performance for the day. When reading charts, it is suggested to use the bar chart or the candlestick chart to easily check the gainers and losers for the day, including the volatility of the market. The line chart is perfect for trending and predicting the direction of the currency for the day, week, month or year.
Another important tip on forex trading for beginners is to try and learn the trade using a trial account, where you shall be trading on live trading platforms using an imaginary account. This will help you gain more insights on the tricks of the trade, and develop your own strategies in making some gains. Once you are confident in trading using real money, don’t go big on your initial investment; but rather start first with the minimum.
It is also important to note that doing the trade on your own without having sufficient skills, knowledge, and ample time to research and get updated with the market developments can put your money at high risk. If you don’t have enough time to do your homework, it is best to use the services of a competent forex broker. Just make sure to choose the right broker that has the successful track record and shows great care in the safety of your investment.
Forex trading never fails to provide unlimited opportunities to earn big with a modest start-up capital, as long as you have the right skills and utmost competence on this aspect. You can eventually become an expert trader some day. But you will have to start by learning some essentials on forex trading for beginners. You can start from this tutorial at http://www.marketsurvival.net/the-advanced-guide-to-fibonacci-trading.