What is Forex trading for newbies. Forex is an acronym for the foreign exchange market. In Forex you are trading one countries currency against another. The prices of each countries currency is always either going up or going down. It never stays the same. Unlike trading stocks with Forex you can earn money when markets go down as well as up.
Another beauty of the Forex market is that it can be traded 24 hours a day. Unlike the US Stock Exchange that is only open during the day. Forex is a 24 hour market. Another great thing about the Forex market is you do not have to invest 10’s of thousands of dollars to earn decent money.
Depending on your broker you can open an account for less than $250 – $500 dollars.
The foreign exchange is traded by pitting one countries currency value versus another countries currency value. For example a common currency pair is USDJPY. This is the currency pair for the US Dollar versus the Japanese Yen. Another major currency pair is EURUSD. This is the Euro versus US Dollar.
Forex Market Hours
As I said the Forex Market is open 24 hours a day 5 days a week. You can still trade on the weekend but the markets tend to be less predictable. We like to work when we can predict what will happen 70 to 80 percent of the time. Makes since right. The market is predictable. It likes to follow in certain patterns which we can analyse and profit from. Do not worry it is simple to learn how to do this. I have a video that will answer a lot of your questions.
A trending market is one that is either going up or going down over a given period of time. There is a saying that the trend is our friend. Once you learn a little about looking at the charts for any given currency pair. You will start to noticed the markets move in trends. Sometimes a trend can move over a large amount of pips or it can be more subtle and only move a short distance of a period of time. But with Forex binary options it only has to move 1 pip for you to be profitable in a trade.
Fundamental Analysis should be done before you start trading. I recommend Forex Factory for your fundamental analysis. It will tell you what economic data each country will be releasing for that particular day. For example in the US the unemployment claims is an example of economic data.
When you look on Forex Factory it will show the data to be released and the time it is going to be released. Beside the data you will see a folder. If it is yellow or orange it should not affect the currencies value too much. If it is red it may have a huge impact and you should avoid trading that currency pair while the data is scheduled to be released.
Another key factor to consider is the strength of the currency you are trading. As stated earlier the trade is made based on two currency pairs. If the first currency is stronger than the second you should look for buy positions. If the second pair is stronger you should look for sell positions.
I like this currency strength meter for a quick analysis. Remember to refresh the page so you get the current values of each currency. They change frequently and you want the best information when you are evaluating potential trade positions.
Recommended Trading For Newbies
For newbies I recommend you first trade forex binary options. Why? Simple you know your how much you will earn per trade and how much you could loose. It is a great way to manage your risk to reward with out the potential of losing all your money on one trade. You can enter a trade for as little as $1usd. The payout will only be around 70 cents. but you will learn how to trade with the small amounts invested. As your account grows so will the amount you risk based off of investing 1 to 3 percent of your account balance per trade.
I know 7o cents doesn’t sound like much but your account will eventually grow to where you are trading $100 or $1000 per trade. So instead of 70 cents you are earning $70 or $700 per trade. With binary options most trades we recommend according to our training is 3 to 5 minutes per trade. Imagine earning $700 in as little as 3 minutes. It can and does happen everyday. Several times a day in fact.
Check out the video below to see why I recommend Binary Options for beginners.
Trading Forex is not hard or complicated to master. With the right training and mindset. You will finally be able to potentially make some life changing income. I invite you to not only make an impact in your life but impact other families as well.