Forex Trading Advice For Beginners
Forex trading is a global financial market where traders attempt to buy currencies that are expected to increase in value and sell currencies that are expected to decrease in value. This type of trading is similar to stock trading in that traders look for trends and buy and sell based on speculation.
Despite its benefits, forex trading is not a risk-free venture. There are risks involved, including account access delays, volatile markets and large lot sizes. A robust risk management strategy should be considered when trading currencies.
For beginners, leverage is an option that could help you control a substantial amount of money with a small deposit. However, leverage increases the risk of losses as well as a potential loss of capital.
To trade, you need to open an account with a broker. Some brokers, such as Interactive Brokers, offer their services online. You can fund your account through a physical check or by using an electronic transfer.
Leverage can also provide a good opportunity to make profits. A typical forex lot is 100,000 units of a currency. Traders can use leverage of as high as x30 for major currency pairs. If you decide to take advantage of this, it is advisable to avoid taking more than 2% of your capital with each trade.
The best time to trade is in the morning, since this is one of the periods of highest liquidity. During the Asian session, China, Singapore and Australia are among the most active markets.