Tips to make money in Forex
Forex trading refers to the exchange of different currencies by a network of buyers and sellers. Currency prices are traded to make money from the exchange rates’ fluctuating prices.
Historically, many hedge fund managers have made a lot of money. For instance, George Soros acquired £1 billion in income in 1992. However, it also indicates you have to do research and cover all areas before you proceed.
Before entering the forex space, you should learn as much about the Forex Financial Market as you can. Moreover, you should know how it works and what the trading hours are, how you want to trade, etc.
Remarkably, currencies are always traded in pairs. There are three types:
- Major pairs trade U.S. dollars with another major currency, such as but not limited to Euro (EUR/USD), or Japanese Yen (USD/JPY), and British pound sterling (GBP/USD).
- Minor pairs refer to currency pairs that do not involve the dollar, such as EUR/JPY.
- Exotic pairs that involve a major currency paired with a minor one such as USD and INR (Indian Rupees)
It has to be mentioned that major pairs have the most volume and volatility. Meanwhile, minor and exotic pairs have less volume and thus less movement.
You will need to choose a specific trading strategy
Technical trading is a trading style that relies on historical chart patterns to forecast future prices. You will need to choose and learn a specific trading strategy and research to find what suits your trading style and goals.
Then it would help if you learned a trading strategy, practice with a sim or demo account. A lot of forex platforms allow traders to create a practice account. It will help you get a feel for the market and how price moves and will also let you practice your trading strategy without putting real money on the line.
After learning to trade with a sim account, you should find a forex broker who will facilitate your trades. It is necessary to consider fees, the currency pairs they offer, the trading platforms they work with, and customer service.
