Can you learn forex online and be an effective currency trader working from home? The answer is yes. In the past, only bank and large financial institutions could trade foreign exchange because you needed millions of dollars in order to trade. However, with the advent of the Internet, retail traders like you and me can now trade forex using online trading brokers. You can open a mini trading account with many online broking firms for as little as US $100.
The foreign exchange market is the largest financial market in the world today with a daily trading volume of about US$1.7 trillion a day. It operates nearly 24 hours a day and 6 days a week. Only 5% of that daily turnover is from companies and governments hedging their currency exposure or regulating their countries' currencies. The other 95% is entirely speculation by retail traders and banks! There are many ways of trading forex. You can trade based on news, fundamental and technical analysis, by economic indicators, short term, long term, you name it. However, the key to forex success is education, a simple trading system and trading discipline.
Anyone can open a forex mini trading account, get 50:1 leverage and start trading currencies. These are the ones who quickly find themselves on the losing end when the leverage works against them. The high leverage works both ways, making $1000 work like $50000, giving you better profit potential but also multiplies your losses when the trend turns against you.
Worse still, there are many new traders who buy an off the shelf forex trading system promising easy 123 buy and sell signals to generate thousands of dollars in income day after day. If they were really that good, everybody would be making bucket loads of cash from the forex markets and put all the financial analysts and professional traders out there out of work.
Getting Started
So what are the things you can learn about forex trading online? Well, to start with, here are some areas you can look up on the internet.
- Forex terminology and how forex trades are done.
- Forex markets hours, and major currency pairs
- Factors that move forex rates, economic news, interest rates, economic data
- Learn how to read charts and patterns, eg. Japanese candlestick, trend lines, support and resistance.
- Learn technical indicators, eg. moving average, MACD, RSI, stochastic. Bollinger band
- Learn a handful of proven strategies employing these technical indicators and chart patterns.
- Sign up for a demo trading account and practice using the software to enter trades (Try out the strategies you learnt earlier)
- Open a mini trading account and practice strict risk management in your trades. Keep your leverage low during practice.
- Develop a mental and emotional discipline in your practice trades.
The last two items on the list are perhaps the most overlooked area for new forex traders. Most new traders focus on the mechanics of trading and fail to develop prudent risk management and disciplined trading. Most traders fail not because they don't have a successful trading strategy but because they fail to follow it by letting their emotions rule their head.
So, to be successful in forex trading, invest in a good education. If you cannot learn everything about forex online, take a home study course and find an experienced mentor to guide you. Before you invest in the forex market, invest in yourself first.
By : Christabelle Chiam - http://www.forexsecretweapon.com/
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