Trading currency in foreign exchange markets, or FOREX, is becoming increasingly popular. There is money to be made; however, many FOREX traders are not consistently profitable. With the advent of mini-FOREX accounts, FOREX trading is now available to anyone with even a small amount of capital.
Instructions
Instructions
- Educate yourself on how the foreign exchange markets work. You will need to understand the basics of relative currency values, which will mean understanding a little economics.
- Pick your trading period. Day traders buy large quantities of currency and then wait for small swings in prices to sell for a profit. This approach requires a great deal of time and micromanagement. Swing traders, on the other hand, take a long-term approach and do not need to be constantly attentive to small changes in the market.
- Decide if you're going to use a technical or fundamental trading approach. Technical traders, which represent the majority of FOREX traders, make their decisions based on charts, and they buy and sell currencies when they reach certain predetermined levels. Other traders trade on the basis of market fundamentals like news reports, macroeconomic trends and commodity prices. The latter strategy requires a great deal more expertise. Of course, some traders blend these two approaches.
- Consider buying specialized FOREX trading software. These can track and analyze data more easily. You can also enroll in many online FOREX courses, but avoid those that make unrealistic promises or charge unreasonable amounts of money.
- Try a trade simulator, a system that uses fake money but tracks the real currency markets. This will enable you to practice your trading skills without risking your own capital, and it allows you to evaluate your own abilities at no risk.
- Set up a mini-FOREX account. These accounts require only a small amount of capital and allow you to begin trading immediately.
