If at first glance you have seen forex trading and feel it is a lucrative business opportunity to make money, you may be wondering what is the best way to start learning forex trading.
There are various ways you can do to start learning forex trading. If you can understand everything about forex, then you will be able to manage all risks in forex, make your trading more profitable, and prepare yourself to become a successful person from forex trading.
Therefore, it is highly recommended that you learn all about forex trading before actually starting to trade on the world’s largest financial market!
The Importance of Learning Forex Trading
If you want to seriously learn forex, then you must know everything related to forex.
While you can learn to trade forex over time, there is no way or method that can go beyond learning from experience, and if you want to learn to trade forex, experience is the best teacher.
When you first enter the world of forex trading, you may decide to open a forex demo account and try to make some transactions with it.
Regardless of how many transactions you make on a forex demo account, the most important thing in this case is to give you a good basic understanding of the mechanics of forex trading and familiarize yourself with the trading platform.
Use a Forex Mini Account
The disadvantage of learning forex trading with just a demo account is that you can’t experience how hard and happy it is to make money trading forex. In other words, to feel this it is more advisable for you to try forex trading but with a mini lot size (0.1 lot), thus allowing you to have less risk as well.
Even though it only has a small profit, transactions with a lot size that are not too large will not make you feel like you are losing too much if you make the wrong transaction.
More than that, it will also teach you hands-on experience about trading psychology, not just reading from websites, books, or forex trading forums and then practicing on a demo account.
Learn Currencies or Commodities to Be Traded
Not only practice using small lots, but you also need to be able to understand the characteristics of the commodity currencies you are trading. We highly recommend this as new traders often tend to make their first trades haphazardly without learning the commodity they are playing with.
Usually novice traders will trade randomly on any currency or commodity without knowing what they really need to do, and end up losing.
Understanding the currencies you buy and sell makes a huge difference. For example, a currency may bounce after a sharp decline. On the other hand, novice traders in this condition often open short positions in the hope that the price will continue to move down.
In such a situation, and if you continue to do so, you may continue to suffer heavy losses. Therefore, that is an example of why you need to know and understand what you are selling and buying.
As you know, forex trading is a high-risk investment. It is impossible to avoid risk, but it is also possible to minimize risk. Managing risk and managing emotions are the most important parts of forex trading. When a person feels emotional, greedy or fearful, often that person makes mistakes that increase the risk.
When you trade, use a logical and objective mindset that will only see if there is a potential profit or not. If you still feel like you can’t manage risk and emotion every time you trade, you should reevaluate why you can’t be objective.