If you’re looking to learn how to trade forex or forex, you’ll want to start off on the right foot by getting some decent forex training from experts in the field. Appropriate types of forex training may involve getting specialized training in a course environment or being mentored by a successful professional forex trader.
If you are considering participating in a forex training exercise as part of your preparation to become a forex trader, look for an educational path that will give you the skills and information you need. For example, you’ll probably want to learn more about trading strategies, market analysis, and principles of sound money management just to get you started.
Read on for more information on forex education and for Benzinga’s take on the best way to learn how to trade currencies.
What is Forex Trading?
Basically, a foreign exchange or foreign exchange transaction involves buying one national currency and selling another at the prevailing market exchange rate. Forex trading is a strategic and speculative activity that involves trading in Forex with the aim of profiting from expected fluctuations in exchange rates.
Keep in mind that if you are used to investing in the stock market with the aim of increasing your net worth over time, for example, you should know that forex trading has a lot more in common with strategic gambling. than with any type of prudent investment. .
For non-professionals who can now trade forex in the retail forex market, preparing to trade forex typically involves opening and funding a margin account with an online forex broker and executing of forex transactions via a forex trading platform. Many retail forex traders use MetaTrader 4 or 5 to get started since the platform is available for free download from its developer.
Why is it important to learn Forex trading?
Many people might want to profit from forex trading, but only a few who are new to the field seem to want to prepare properly to become successful currency traders. Although the mechanics of forex trading are very easy to master, learning how to trade forex profitably can take a lifetime.
The sobering fact is that most retail forex traders lose money, and they do so for a variety of reasons. Some may have failed to familiarize themselves with the market and its driving factors. Others may have started operating without sufficient trading capital to survive a series of virtually inevitable losses. Then there are those novices who fail to develop and test a decent trading plan that includes practical money management principles to help preserve their trading capital.
That said, just about anyone willing to put in the time and effort to learn and understand how forex trading works has a chance of becoming a profitable forex trader. The retail forex market has opened wide over the past few decades to accept new participants from all walks of life, including you.
Five Ways to Learn to Trade Forex
It doesn’t matter if you want to learn how to become a day trader or a scalper, if you are looking to learn more about forex trading for beginners, then Benzinga has compiled a list of five ways below that you can get started with this important task. .
Before online forex trading appeared a few decades ago, there were very few opportunities for retail traders to learn how to operate in the forex market. There was no formal process for teaching forex trading, and pretty much the only way to learn how to trade forex was to work as an apprentice to a professional forex trader working at a financial institution or exchange where the contracts at currency futures were traded.
With the advent of online forex brokers and the almost limitless educational resources available via the Internet today, learning how to trade the forex market is much easier, more readily available, and less complicated. For example, you can read many articles written by experts and booksas well as webinars and educational videos on forex trading.
The fastest and probably the best way to learn how to trade Forex is to gain hands-on experience which you can easily get for free by opening a demo account with an online broker. A demo account lets you practice real-time forex trading using an online trading platform and virtual money so you don’t put your funds at risk while you learn the tricks of the trade. Practicing in a demo account gives you a great idea of the forex market and a great framework to self-educate yourself in forex trading.
Social trading is another increasingly popular avenue for learning to trade by watching and copying a successful trader’s trades into your own account. You may also have the ability to follow another trader’s trades without performing the same trades on your account. This practice allows you to observe how this trader’s trading plan works and uses signals for his initiation and exit positions.
Perhaps the most obvious advantage of self-education is its low cost. Self-study can be much cheaper than a mentorship program or expensive online forex trading courses. Nevertheless, self-education has its pros and cons.
- Work and learn at your own pace
- Develop your own business strategy
- Simple to start
- Low start-up costs
- Targeted training based on your areas of interest
- Can open a free demo account to practice
- Steep learning curve
- High risk when learning in real account due to market volatility
- Possible lack of structure
Forex Trading Courses
A variety of forex trading courses are now available. They largely exist online these days, although some are still taught in person. Some forex courses may be offered for free, while others come with hefty fees.
In addition to a basic introductory forex course, you can also take courses that cover specific topics related to forex trading techniques and forex strategies that you think you need to know more about. This process can help you complete and direct your educational process.
- Learn through a structured program
- Access to a variety of different trading strategies
- Specific courses for different aspects of trading
- Can be expensive
- May not address specific trading strategies or concepts of interest
You can get personal training or mentoring from a professional forex trader. Many new to forex trading find this more personal approach effective once they have mastered the basics.
Most mentors charge by the hour for general training and more specific consultations. Since some personal trainers and mentors are definitely better than others, it makes sense to get a recommendation from another forex trader who was happy with the training service they received.
- Personal attention to your trading goals and issues
- Useful for fine-tuning your trading strategy
- Can be done remotely
- Benefit from the wisdom of an expert
- Quite expensive since you are paying for the time of an experienced trading professional
- Not all trading experts are equally good mentors
Watching videos online can increase your existing knowledge base on various forex trading topics. Make sure to watch videos from people who actually know what they’re talking about because almost anyone can create a YouTube video. Most online brokers offer video tutorials for their clients. Therefore, visiting your broker’s website would be a good place to start looking for videos from good sources.
- Progress at your own pace
- Learn from home, on the go or in your free time at work
- Low or no cost
- Good to complete or deepen your trading education with specific topics
- Does not accurately reflect real-time market conditions
- May not apply to your particular trading style
Forex Trading Schools
A forex trading school may offer online courses or in-person workshops that can help you achieve a more interactive forex training session. The best type of forex trading school for your needs will partly depend on your ability to personally attend classes and how you prefer to learn.
- More structured teaching process
- Tests and milestones to measure your progress
- Introductory course for a general overview of the subject
- May require personal attendance
- Additional travel and accommodation costs for in-person schools
- Expensive tuition
Best Forex Brokers for Beginners
Some online brokers that offer retail forex trading are certainly better than others for beginners. For example, you’ll likely benefit from opening an account with a broker that offers good resources for those new to forex trading, such as free educational materials, ebooks, webinars, and video tutorials.
You will also generally want to select a well-regulated and reputable broker that offers high-quality forex trading service to residents of your country. Finding an online forex broker can be particularly difficult if you live in the United States, as many do not accept US-based clients.
Benzinga has simplified the process of finding a good forex broker for novices by compiling the following table of suitable brokers.
CedarFX is not regulated by any major financial agency. The brokerage is owned by Cedar LLC and is based in St. Vincent and the Grenadines.
Frequently Asked Questions
Can I learn forex on my own?
Yes, you can learn to trade forex from books, videos, and other self-guided learning materials, although you may need expert mentorship if you fail to become profitable and want to continue. to trade.
Can I learn forex for free?
Yes, many online forex brokers offer a wide range of educational materials for novice forex traders that can teach you how to start trading forex. Keep in mind that learning to trade forex is not that difficult, but learning how to do it profitably can take a lifetime.
How long does it take to learn forex?
It should take less than an hour to learn how to enter a forex trade. It should take a few months to learn what drives exchange rate movements and how to analyze the forex market so you can take a strategic position on a currency pair. Yet it can take a lifetime to learn how to trade forex successfully, and many newbie traders fail before they do.