Here is the critical guide to start your journey in forex trading.
If you have extra cash in your bank account and you want to make $50 per day, this blog post will help you make it.
We have so many local businesses that you can invest $200 and make more profit out of it but forex market is the only business that you can make profits in your smart phone while connected to internet, all you need is skills and knowledge.
Stick around.
I’ll share important insights on how you can go about and start earning $100 and more per day.
Trading is the game changer, I literally make $800 and above monthly while trading.
Forex is the largest and most liquid market in the world by far, with estimated $6.2 trillion changing hands daily
What is Forex?
Forex is known as foreign currency and exchange. Foreign exchange is the process of changing one currency into another currency for either trading or commerce purposes.
Do you travel? If the answer is “YES” you clearly understand what foreign exchange is done along borders. If you have Kenyan shilling and you’re in Tanzania you need Tanzania shilling to make payments. To get Tanzania shilling you need to exchange your Kenyan shilling into Tanzania shilling, here is when forex comes into play.
Take Away Note: Forex market is the largest global market with estimated 6 trillion US Dollar trading volume per day.
What is the Forex Market?
The Forex market is where currencies are traded for different purposes including e-commerce which allow us to purchase goods and services locally across borders. International currencies have to be exchanged to other currencies to support and allow to conduct foreign trade and business.
One cool thing about this international market is that there is no central market place for foreign exchange, everything is conducted electronically over the counter (OTC) which means all transactions occur via computer networks among buyers and traders.
Pro Concept: Over The Counter (OTC) refers to the process of how securities such as equities, debt instruments and derivatives are traded through broker network as opposed to a centralized exchange
A Simple Brief History of Forex
According to the history of money, forex exchange has been around for centuries where people have always exchanged or bartered goods to goods or goods to services but as of today innovation is high making forex modern invented to simplify the process between buyers and sellers.
As of today, you can benefit or profit from the difference between two currency interest rates in two different economies through buying the currency when price is lower and selling when price is higher.
Pro Tip: Currency trading used to be difficult for individual before internet. Right now, everything is modern allowing different participants including corporations, hedge funds, companies and Central banks. Retail traders can participate in trading with minimal capital through brokers using leverage.
Why Forex Market?
Internal businesses is the only thing that connect one country to another country. Forex removes boundaries to enable different activities to be conducted including e-commerce and trading.
We have two major uses of the forex markets which include enabling Hedging and Speculation.
Forex for Hedging
Take an example of companies operating in foreign countries while holding assets in a foreign currency like Tanzania shilling, valuation will be at risk due to fluctuations in currency values.
The forex market allows Companies doing business in a foreign country to hedge currency risk by fixing a rate at which transactions have to be completed.
A company can plan to sell US dollar to Pound at a certain currency rate simple because forex allows to trade on forward or swap markets.
Forex for Speculation
The value of the currency is determined by the general economy of entire country or certain zone, fundamentals like interest rates, geopolitics and economic strength affect supply and demand for currencies creating volatility in the forex market.
Opportunities exists when we have volatility to enable speculators to profits from changes that may increase or reduce one currency’s value compared to another.
How to start Trading Forex
Make sure you have a legitimate forex broker.
Trading forex is not difficult especially if you have a clear understanding of the market movements, you can make hundreds of dollars within days same applies you can lose your initial investment capital within seconds if you’re not careful. Here are some steps to get yourself started in your forex journey.
1. Find a way to learn about Forex
If forex was the subject in class I would go after it because its about how to print my own money using my smartphone with internet connection.
Forex trading requires specialized knowledge to understand how to risk your entire capital for a specific win. In forex if you don’t understand simple concepts, you’re likely to lose money same applies when you understand such concept you print your own money.
There are several forex course and smart forex professional traders that you can learn from them including fxbuniversity courses.
2. Set up a brokerage account
To start forex trading you need a broker where you’ll be allowed to create a trading account and start trading. Forex broker acts as intermediate to link you with liquidity providers where you get best quote of currencies, commodities and indices Forex brokers have different angles where a trader has to pay for his services including commissions, spread, swap and tax to some brokers.
Checkout this blog post on how to choose the best forex trading broker
3. Choose the trading platform
Trading forex is made simple in this current innovation world comparing to the previous days when we had trading floors. Back 1990’s a trader or investor would require to call a broker through telephone to place positions, right now you need a laptop and internet connection with a trading platform
Meta-trader4 or 5 is the only platform obtained from the broker, most of traders particularly expert traders never prefer to use mt4 to make analysis instead trading-view platform.
Pro concept: in forex trading we prefer to use platforms which are favorable to make your analysis, tracking your trades, multiple bunch of different tools.
With trading-view platform will be able to track your trades even with a smartphone, you can set alerts so you don’t miss trades.
Click here and signup for Trading Platform
4. Develop a trading strategy
To trade forex is easy when you understand what to do in the market, by doing so you need a trading strategy or trading methodology to help you predict price movements . A good trading strategy is based on the reality of your lifestyle and finance, it should take into account the amount of cash that you are willing to risk and tolerate without getting burned out of your cash balance.
Checkout in details things to consider when creating a good trading strategy, remember forex market is the highly leverage market which offers more reward if your odds goes into your favor same applies trading forex with high leverage you can lose your entire investments.
5. Create emotional balance.
Forex market is high volatile market which offers a bunch of $6 to $7 trillion daily turnover, for beginners never understand major participants in the entire market which create them to trade under tension of getting quick money. Trading psychology is the major key concept to make you be a profitable trade-in the forex market. Checkout our major blog post on how to manage and master trading psychology.
6. Always be on top to manage your positions.
Forex trading is the game of money, and for you to make more money you need to master risk management. They’re so many soft-wares out there you can use to exactly know what lot size to use to a particular capital balance, a lot of beginners end up blowing accounts simple because they didn’t understand the concept of using risk management.
7. Choose your trading style
In forex trading there are multiple trading style which suit your daily activities, finance and risk tolerance.
Checkout this blog post on how to choose your trading style
Pro Tip:The foreign exchange is the market where currency, commodities and energy pairs are traded. Currencies always trade in pairs, such as the GBP/USD which the trader makes position basing on the assumption of price changes between the Pound currency and the Dollar currency.
Currency price changes are measured in pips which is the difference between ask price and the quote price. A trader will make profits by placing buy or sell positions.
Conclusion
I understand most of you will be asking questions like Is trading forex trading Safe?
Yes like other investing business, forex carries risk, primary among risks to forex trading is market risk which is investment risk and counter party risk when your broker goes bankrupt.
A Pro Tip: Before you start forex trading seek education and ask yourself a primary question like are you comfortable with your risk appetite? … how much you can afford to lose and how much you want risk.
Before you risk you highly earned chunk of money it’s a good idea to seek for education, so you know exactly how you can make $100 per day in your smartphone
Remember that most people go broke – or at minimum never like to learn new skills and end up regretting like why I never did something else – don’t be such person.
Don’t be like the average individual.
An effective way to optimize your money could be to:
- Understand your short term financial goals like either trading or investing in short term cash flows
- Understand your long term financial goals
- Create an according game plan
Once you have your game plan in place, all you need is to implement the available extra cash to make you more cash.
Your bank accounts will thank me later.