How to Learn Forex Trading Fast

There is no question that when it comes to forex trading, there are endless things to learn and know. However, finding the time and the funds to actually invest in your forex education can be expensive and time consuming. However, if you are ready to increase your knowledge without going broke, use the tips here. 

How to Get Educated About Forex

To trade effectively, it’s critical to get a forex education. Spend some time reading up on how forex trading works, making forex trades, active forex trading times, and managing risk, for starters. There are plenty of websites, books, and other resources you can take advantage of to learn more about forex trading.

As you may learn over time, nothing beats experience, and if you want to learn forex trading, experience is the best teacher. When you first start out, you can open a forex demo account and try out some dry-run trading. It will give you a good technical foundation on the mechanics of making forex trades, as well as help you get used to working with a specific trading platform.

Establish Communication with The Forex Broker

The best place to start when you are working to improve your trading knowledge is with your forex broker. They typically have access to all sorts of information such as news, analysis, tools and more. There are some forex brokers who provide entire education centers that are dedicated to helping you increase your knowledge regarding the foreign exchange market.

In addition to resources, the forex broker you use should also provide you with a demo account, where you will be able to practice your trading, at no cost. This type of account is the ideal opportunity to engage with and review the platforms that are available and learn about what to do prior to getting started with your real money.

Choose a broker

There are quite literally millions of different forex brokers to choose from and you should look at what each one offers.

If you did the first step right, then you should be able to understand what they are offering and how this compares to other brokers. If not, then you need to do more research!

Ideally, you should stick to a well-known broker, one that many people use and is trustworthy. You should be able to check reviews brokers and see what people are saying.

It is best to avoid lesser-known brokers as it can be harder to tell if they are scams or not. Further to that, they will likely not offer the same quality service a well-known broker will.

You also do not need to pay too much attention to special offers for new traders. If a broker is good, they shouldn’t need to offer you anything extra.

But none of this really matters if the broker you choose is not regulated! This is the most important thing to look for. If you can’t find out who regulates them, stay away.

And preferably, the country that regulates the broker should be the same as the one you reside in.

Sign Up for a Training Course

One of the best and most effective ways for you to increase your knowledge of the forex market is by enrolling in a forex trading training course. While this may be a bit more expensive option, chances are you will be able to find something that meets your budget.

If you are ready to be immersed in the environment of currency trading, and surrounded by experts in the field, then this trading course is perfect. You will be able to gain knowledge about the trading and the chance to interact with your tutor, asking questions that come up along the way. The valuable lessons that you can learn can help you during your trades.

Practice with a demo account

A demo account is a practice account that mimics a real trading account. It allows you to practice trading with virtual money without risking your own funds. Most forex brokers offer demo accounts, and you can sign up for one to practice trading. It’s essential to practice with a demo account before trading with real money. This will help you get familiar with the trading platform, test your strategy, and build your confidence.

Read forex trading books

Reading forex trading books is another way to learn forex trading fast. There are many forex trading books available, and they cover a wide range of topics. Some books are geared towards beginners, while others are more advanced. Reading books will give you a deeper understanding of the forex market, trading strategies, and risk management.

Use trading signals

Trading signals are alerts that indicate when to buy or sell a currency pair. They are generated by professional traders or trading algorithms. Using trading signals can help you make profitable trades without spending too much time analyzing the market. However, it’s important to choose a reputable signal provider and test their signals on a demo account before using them with real money.

Learn about the currency pair you are trading with

Random decisions have no place in trading, and you only stand to lose your capital if you trade currencies without understanding what they are about. The strength of a currency is affected by the economy behind it, and knowing this can influence your trading decisions.

It gives you insight into what to buy or sell and the best strategy to use for specific pairs. Start with a few currencies and keep up with the economic news regarding those currencies. Include technical analysis and see how you can combine the two to make successful trades. As your experience grows, you can increase the number of pairs you trade with.

Forex Trading For Beginners

To summarize the whole beginner’s phase of starting to trade Forex we need to look at exactly 10 major steps that a beginner has to take.
 

  1. Learning the basics (currency pairs)
  2. Learn the software (MT4, MT5)
  3. Learn with demo accounts
  4. Find a reliable service provider
  5. Use the service provider’s resources such as tools and guides
  6. Try out the support services of the provider 
  7. Learn about strategies and try them all out
  8. Create a plan for reading news and doing independent analysis
  9. Keep weekly track of the progress
  10. Start placing real trades

You will learn a simple strategy that you can use as a beginner to start trading Forex

Understand how to trade The Forex market

Learn how to place a trade on the Forex market

Learn how you can earn money trading Forex

Understand how you can protect yourself should the trade not go your way

Understand what are Japanese Candlesticks

Learn how to identify the various types of Japanese Candlesticks

Learn how to trade Japanese Candlesticks

Learn that Japanese candlesticks often indicates potential turning points in the market

Understand what are trend lines and how to draw trend lines

Understand the significance of trend lines

Learn that trend lines act as levels of support and resistance

Learn how to trade trend line breaks and bounces

Understand the A,B,C,D price wave movement and how to identify these movements

Understand basic forex terminology

  • The type of currency you are spending or getting rid of, is the base currency. The currency that you are purchasing is called quote currency. In forex trading, you sell one currency to purchase another.
  • The exchange rate tells you how much you have to spend in quote currency to purchase base currency.
  • long position means that you want to buy the base currency and sell the quote currency. In our example above, you would want to sell U.S. dollars to purchase British pounds.
  • short position means that you want to buy quote currency and sell the base currency. In other words, you would sell British pounds and purchase U.S. dollars.
  • The bid price is the price at which your broker is willing to buy base currency in exchange for quote currency. The bid is the best price at which you are willing to sell your quote currency on the market.
  • The ask price, or the offer price is the price at which your broker will sell base currency in exchange for quote currency. The ask price is the best available price at which you are willing to buy from the market.
  • spread is the difference between the bid price and the asking price

Utilize Free Resources and Practice Demo Account

Forex first became popular back in the 1990s, but it has changed quite a bit since then. In the past, you would have to travel several thousands of miles in order to find a reliable trading course that was being hosted by a professional in the industry. However, today, you can simply Review Online Forex Brokers, find one that offers free webinars, or tutorials and take advantage of their knowledge in the comfort of your office or home. This has made forex trading accessible to more people than ever before.

Manage Risk and Emotions

Managing risk and managing your emotions go hand in hand. When people feel greedy, fearful, or another emotion, this may be when they’re more likely to make mistakes with risk. And this is what often causes failure. 

When you look at a trading chart, approach it with a logical mindset that only sees the presence or lack of potential for success. It should never be a matter of excitement. 

If pulling the trigger on a trade feels emotional in any way, you should re-evaluate why you’re doing it and try to regain an objective mindset.

Use a Micro Forex Account

The downfall of learning forex trading with a demo account alone is that you don’t get to experience what it’s like to have your hard-earned money on the line. Trading instructors often recommend that you open a micro forex trading account, or an account with a variable-trade-size broker, that will allow you to make small trades. 

Trading small will allow you to put some money on the line, but it will also allow you to expose yourself to very small losses if you make mistakes or enter into losing trades. This will teach you far more than anything that you can read on a site, book, or forex trading forum, and it gives an entirely new angle to anything that you’ll learn while trading on a demo account.

3 Things to grasp in currency trading:

  • Currency Prices
  • Currency Trades
  • Types of currency traders

Forex Spread

In Forex, the spread is basically the difference between the bid and ask price of a currency pair. Let’s look at an example:

Let’s say that the bid price is 101.15 and the asking price is 101.20 the spread is 5.

A spread is measured in pips, so the above would be called a 5 pip spread. If this is a bit overwhelming check out our How to guide explaining all you need to know about Pips. This is forex 101.

A pip is an acronym for “percentage in point” which is the smallest price move that an exchange rate can make based on what is currently happening in the market.

Currency pair traders will buy or sell a currency whose value is expressed in relation to the other currency. A pip is one of the most basic concepts of currency pair trading.

In Forex trading, the value of a currency pair will need to essentially cross the spread before it becomes profitable.

What is the cost? 

Online Forex trading can and has been a great income-generating activity; it is extremely important to treat this trading as a business activity.

It’s important to consider how to maximize your income, minimize your costs and risks, which are always a big part of trading. Its a buy and sell exercise explained in lament terms.

You must always consider the costs of trading with Forex brokers, that is before you decide on the right broker for you.

You will need to have an account with a Forex broker to begin trading in Forex; because there are no set rules on how Forex dealers charge, you are going to need to investigate and compare the costs and services of brokers.

Available trading tools 

Another factor to take into consideration is the quality of trading tools a Forex broker will offer. It can make a huge difference to your initial trading experience. Usually, the tools and features available to you depend on which trading platform or platforms are being used.

Initially, you want a simple, intuitive trading platform, later on, you can level up to take advantage of more advanced, professional features and tools.

Tips for beginner traders 

  • Do your research, educational videos for beginners, educational articles and tutorials, Forex trading seminars for beginners, Forex trading webinars.
  • Learn as much as possible before your 1st fx trading session.
  • Try out a demo account, or practice with simulation software.
  • Try not to overcomplicate situations, risks, and other things.
  • Be careful of volatile markets.
  • Follow trends as they boom.
  • The trade is open until it’s closed.
  • Write down EVERYTHING in a log: points for further research, reasons to open or close a specific trade, your achievements and mistakes.
  • Start with the bigger fx currency pairs to trade with like AUD / USD / GDP / EUR / ZAR / CAD
  • Liquidity providers should be on top of your list when choosing an fx trading broker.
  • Always have a stop and limit loss in place.
  • Understand the risks involved!
© ForexExplore.com 2007 – 2024 Trading financial instruments carries high level of risk to your capital with the possibility of losing more than your initial investment. This site will not be held liable for any loss or damage in result from using the information within the site including forex Broker reviews 2024, market analysis, trading signals, learning resources and comparison tables. The data within this website is not necessarily real-time nor accurate and do not represent the recommendations of the employees. Currency trading is not suitable for all investors. Before deciding to trade currency or any other financial instrument please consider consider your investment objectives, level of experience, and risk appetite. While we do our best to provide up-to-date information, we strongly encourage you to verify it directly with the broker of your choice.