One of the most alluring aspects of the forex markets is that anyone who is a legal adult and has at least $250 can trade forex. This doesn’t mean that you’ll instantly be successful, however. That requires a lot of research and practise. Nonetheless, if you’re young and have spare time on your hands, nothing beats learning about a subject that may reward you with a lifetime of pleasant trading experiences. Start with the internet and check out the monetary policy sections of the world’s central banks. It’s far more interesting than you think, particularly when you realise that sometimes it only takes 1 word (e. g., “taper”) to send the entire forex industry into a pricing tizzy. Go sniff around Barclay’s “barclaysmarginfx.com/resources” website, looking for morsels of forex wisdom and recommendations. The weekly video section of Westpac’s “westpac.co.nz/business” website is also informative with info on how to trade forex.
While you are on the internet, open up a “demo account” and start learning the mechanics of trading. Demos are risk-free and are a great teaching tool.
Do You Need A Lot Of Capital To Trade Forex?
Forex is one of the few capital markets left in the world where any adult that has at least $250 can open up a trade forex account. What makes this situation even more interesting is that while such “mini” and “micro” accounts trade “mini” and “micro” forex contracts, the amount of leverage offered is generally the same as in a regular, or standard, account. This means that how well you trade matters far more than how much you trade. Equally obvious is the idea that anyone who can consistently bag a 10% profit isn’t going to have a small amount of money in their account for that long. In other words, the quality of your trading is everything; size hardly matters.
What Preparation Can You Do To Protect Your Capital Before You Trade Forex?
The more research you put in – before you start trading – the better your chances are of being a successful trader. Once you start trading, you’ll not have the time to peer into a book or look on the internet for the answers to such questions as: “What’s the 10:00 am New York fix and why does my USD/JPY trade always go nuts right before that time?” or “Why does the EUR/GBP always go up at the end of every month?” or “Who is this Mr. Kuroda, whose speech just knocked the socks off the AUD/JPY?” Sign up for a demo account before you ever start trading “live”. Demos are a risk-free way to work out most of your trading questions.
Making A Profit From Your Capital As You Trade Forex
Many short-term traders use moving averages to help them figure out when to enter into a trade and when to exit. Newbies should practice this art, on a demo, with the aid of a 1-hour chart of the AUD/USD and a “Williams Alligator”. The Alligator is composed of 3 “smoothed” moving averages, usually including one 13-period, one 8-period and one 5-period line. The 5-period moving average is the trade signal line. When it crosses over all the other ones, you enter a trade in the direction of the 5-period line. You stay in the trade until the 5-period line crosses back over all the other lines. Try to guess when the Alligator is going to bust a move and why.