There are various steps which people take so that they feel that for sure they are forex traders. Most of the steps are taken whenever people are trading as beginners on forex or they want to exit it with some knowledge which they already have under their belt. The following according to the forex brokers in South Africa are a summary of what the phase of a beginner who is beginning on the forex will have to look at the steps that they have to take as beginners:
- Being able to learn the currency pairs basics
- Being able to learn about the MT5 and MT4 which are the software
- Use demo accounts to learn
- Find a service provider that is reliable
- Use a service provider various resources like guides and tools
- Try out the support service of the provider
- Come up with a plan for being able to read the news and do analysis independently
- Keep the track of weekly progress
- Start to place real trades
All the above might seem to be quite overwhelming but a newbie might take it step after step so that the materials for learning are always simple to handle. The beginners forex trading is hard and will require some hours of time each day in order to be able to remain updated on the new strategies, news, and all the materials which are required. Apart from that, it is not something which people can do on a weekly basis. It might take months and at times years. Even for the traders who are experienced, they will always learn something new anytime they are in the market.
Everyone in the market do have their own method to learn the forex trading, which is the reason behind it being hard to get a guide that is universal. In majority of instances, traders find stories of success from across the globe and try including them in their strategies in their unique methods. But it might be something which could be risky because majority of the success stories are of people risking quite highly and in the process, getting lucky in the market.
It might take more time but the ways of learning regarding trading in for the beginners are normally recommended to be free of any risk if possible. But at times, they end up into the three below strategies.
- Try learning through the guides of online
- Copy traders who are successful
- Try to learn while trading and making mistakes along the line
All the three have their own pros and cons but there are some which have been tested after being tried as strategies.
Learning for free
It could sound surprising but it is possible to learn free trading in forex. The method that the newbie use in this particular scenario is something that involves the demo accounts and the bonuses for no deposit. But what is it all about them?
The demo account is similar to the real account where you will exchange currencies, place trades, and have some sort of payout. But having to trade on the demo account doesn’t utilize real funds. The company owning the demo account gives the traders some virtual currencies to be able to trade with and in the process learn as they continue. It is something like a beginner’s sandbox.
A bonus for no deposit is the real answer on the way to trade with forex for newbies in majority of instances. The market newcomers tend to get a company which has this particular service and embraces it immediately. It might be trading for free but there could be reasons why it is not quite effective.
It could be that, when the trader has nothing to lose they will be in a mood that is different from when they have something on the line to lose. They might get themselves in to risk and don’t do much of research before placing their bet. Due to that, they don’t end up learning quite much about the strategy and in the process, waste energy and time.
Common mistakes which beginners in forex make
It doesn’t really matter the strategy that you end up to use, chances are that you will get to make certain mistakes on your learning journey. It is not something that you need to be ashamed about and there is no fear also. It is something that happens every time and those who have been in forex trading for decades tend to make the same mistakes.
But this does not mean that the strategies for forex trading for newbies can’t be planned while having in mind the common mistakes. The following are some of them which are made by newbies:
No research done before
Forex might be a market which is influenced mostly by demand and supply, but it also is one that changes as per what is working in the world. Take for example the Brexit. When the first announcement was made by the UK that they will be leaving the European Union, there were several traders that believed that it will end up hurting the economy and thus, they began to sell their GBP.
It is what decreased the demand and increased the supply. Due to that, there was a change in the exchange rate and those who didn’t consider the Brexit as an influence did not see a week that was successful. New information daily is important when dealing with risky trades
Not being able to follow trends
It could be anything. It normally starts whenever a large market part starts to agree on a particular thing. Using the Brexit example, you can start to imagine a trader who refused believing that the economy of the UK will go down.
They could have been correct, but would still not be successful in the forex market. An essential thing that you have to consider when trying to learn about the forex trade is that no matter the wrong thing about a particular trend, it will end up influencing the demand and the supply as long as there are enough people who believe in it.