The mechanics of learn how to place a forex trade is extremely easy and therefore it is very easy to make a mistake. For example, you select the BUY command when you really wanted to set the SELL action.
The irony is that it is so easy to place a currency trade, that your chances of making a mistake increase.
Regardless, when you set up your trading account, all you need to do is take action on 3 simple steps:
- Currency Pair – Price to enter
- Lot Size – How much you want ($) to trade
- Exit Point
You have hear it thousand times, “Buy low, sell high!”, and with Forex trading you can even make money when the market starts to head down – “Sell High, Buy Low!”.
Well that one can sound confusing, but let me explain.
You start by selling a currency pair position, in this case a currency that you below is dropping in value to its pair. For example, you believe the USD is going to lose value to the GBP (British Pound). In this case, you can start by selling the USD to other traders who believe the opposite. What you do is agree to sell some else the high USD. If you are right, later in the day you exit our position and buy the low USD to other guy and you pocket the difference!
As a beginner you can start with a min-account in live account or you can start trading a regular demo account.
In the regular account you can make a $5,000 dollar deposit and start trading with $1,000 dollars . With a 10:1 margin, this means that you are actually trading with $100, 000 – bingo you’re playing with the big money players trading international currency.
Anything is possible, in forex trading… things move so fast you are up 100% then you’re borrowing money from your in-laws. Just be aware that currency trading is a 2-way street. In other words, it is a zero-sum game, at the end of the day there is a loser and a winner.
As a newbie it is critical and important that you master to be consistent, persistent and intentional on making many “Low Risk Low Return” positions before you try to max your ROI with a 100:1 margin. Start small, with a low margin 10:1 and learn to slice small profits. Experience is the only way to learn, but you can do so with a live trading room or with a mentor.