The good part of being a newbie is that, when you are new to a certain thing, you have a lot of things to learn in that field and that opens endless possibilities of turning this opportunity into a great success. On the flip side, when you are not aware of how the new field is going to react to you as a newcomer, you are always vulnerable to scams and other misfortunes of the business that can be associated with a noob.
New to Forex? Read This!
Lots of people think that Forex is as difficult as self-learning German with the help of German websites, which is something too hard to understand. This is not true at all. Forex is just like any other trading market and it follows the simple fundamentals of trade, which are followed in any trading system. There is a popular saying which holds true for Forex and it says that there are two types of people who deal in the Forex market: one who has money and no experience and the other who has experience but no money. Both these people enter the market to try their luck. At the end of the day, the situation gets reversed. The person, who came in the market with money spends all of it and buys the precious experience, while the other guy, who dealt with Forex with his experience, spends his knowledge and gets back home earning money!
If you are planning to enter Forex Trading or are inquisitive about how exactly things work in Forex, then you can help your understanding with a simple example. Let’s say you have a shop and you sell cell phones there. You buy a cell phone for 100 units and sell it for 105 units. So, in this way, you make a profit of 5 units on each cell phone.
Now, let’s assume you have information from a trusted source that a new brand is about to enter the market and will do wonders. Initially, they will sell their phones at half the rate and, as they become popular, they will increase their price. From your knowledge and experience in the market, you can conclude that these cell phones are great and if you buy them in bulk when they are half the price under the introductory offer, then you stand a good chance to make a great profit from every unit when their price goes up. This basically sums up the Forex market for you, the only difference being that the commodity here is not cell phones, but the real currencies of different countries. Other things like buying and selling of stuff as per market manipulations remain the same as in any other form of trading.
One thing that you need to be cautious about when you start your journey with Forex is to beware of Forex scams. Scams are the dark spots that are unfortunately associated with every business. Forex is considered to be one of the most lucrative ways of making big bucks, and this illusion had made it one of the favorites choices of scammers. You have to understand that Forex is no overnight success fantasy, so protect yourself from the luring promises that people around you keep pandering so that they can sell their Forex related products and services to you. The more alert you are with them, the less likely you are to fall in their traps.
Forex is one of the most robust and energetic markets in the world. You can not only make great profits while trading with Forex but can also learn precious lessons of life that are sure to enrich your experience and widen your horizon to take your knowledge to the next level. Just be honest with the realities and have the guts to survive times of crisis, and you will surely do well here in the long run.
A quick and easy guide to Forex
Here are some of the most frequently asked questions about Forex and Forex Trading, which we come across every now and then. A quick look at them will help you to get some useful information about the Forex market.
a) What is Forex Trading?
As the name suggests, the ‘For’ in the word stands for ‘Foreign’ meaning international and the ‘Ex’ is for exchange. Thus the word Forex stands for exchange of international currencies. The place at which this exchange occurs daily is called the Forex Market.
b) How big is the Forex Market?
It’s mammoth! It is the undisputed king of all trading markets in the world with trading activities involving trillions of dollars every 24 hours.
c) How is trading done?
The trading takes place between the buyer and sellers through an exchange. Brokers also play an important role in these trading activities.
d) What kind of investment is required to get started with Forex Trading?
There is no limit to what you can earn and lose in this market. So whatever you invest can be gone in a few days; but at the same time, you can start with a small investment and make it big with time. What matters more is your understanding of the market. If you are able to judge the market trends and trade accordingly, then you are more likely to profit from it than by making big returns with big investments.
e) How can one learn Forex Trading?
The best way to learn any trade is by participating in it and Forex is no exception to this rule. Participation does not necessarily mean that you have to put your money and experiment with it. It rather means that you have to keep yourself updated with day to day happenings in the market and observe how the market reacts to news and manipulations. This habit will gradually develop your market sense, which will be handy in dealing with Forex.
f) How can I become a successful Forex Trader?
This will depend on your ability to grasp new things and your mental toughness at the time of crisis-type situations. If you are able to observe market trends and do not get affected by the panic situation that surrounds the market every now and then, you will be able to make the right trading decision, which will eventually turn you into a successful Forex Trader!
