What is Forex Trading?
The buying and selling of currency pairs between the institutional and retail traders at a particular current price. In simple terms is the conversion of one local currency to another foreign currency. For example USD to Rand, ZAR, therefore the final exchanged rate will be USD to ZAR as USDZAR.
Who Moves the Forex Market?
The forex market daily volume is a combination of global transactions by participants including banks, hedge funds, brokers, and individual traders in different time zones. According to the International Monetary Fund (IMF), the US dollar comprises roughly 62% of the world’s official foreign exchange assets held on reserves by the central bank in foreign currencies The US dollar is the most traded and volatile currency, making up to 84.9% of all those transactions!
How Can I Start Trading Forex?
To become a successful trader, you need to have sufficient resources that make a profitable trader. The following are key points to consider to start trading:
- Learn more about fundamental analysis so that you can understand the economical aspects of the currencies, for example NFP or FOMC. Lastly, learn the components of trading psychology and technical analysis which will help you execute trades based on trading structures and patterns such as applying oscillator indicators to read the price, market structures to determine the market direction, head and shoulder’s pattern to read price patterns.
- Develop a trading strategy that suites your personality, trading plan and identify what type of a trader you are: either a day trader, swing trader, or a scalper.
- Find reliable and best ECN or STP forex broker in your country and open a demo account to practice what you have learned.
- Journal your trading process and if you are ready, confident, have learned and developed a strong trading psychology, open a live forex trading account.
- You can also take advantage of funding programs and funded trading accounts if you do not have money to fund your trading account as they will help speed up your trading success. You can learn more at Funddaytraders.com