How To Day Trade Forex
You’ve heard about the many people making a sizable fortune in the Forex market. In this article, you will be presented with some introductory information about the Forex market to get you started on a similar path. You too can become a profitable Forex day trader if you follow the simple rules outlined below.
Forex is the Foreign Currency Exchange Market. Currencies are traded in pairs, such as the US Dollar (USD)/British Pound (GBP) pair. The most commonly traded currency pairs in the Forex market are the US Dollar/Japanese Yen (USD/JPY), Euro/US Dollar (EUR/USD), US Dollar and Swiss franc (USD/CHF) and the British Pound and UD Dollar (GBP/USD). The Forex market trades 24/7 and moves in pips.
A pip is .0001 for most currency pairs and .01 for JPY combined currency pairs. On a standard contract, with a leverage of 100:1, one pip is worth $10. If you trade smaller sizes with smaller leverages, the value of each pip is reduced. For example, a mini lot pays $1 per pip, whereas a micro lot pays $0.10 per pip.
It all depends on what size account you start with, and how much you are willing to risk per trade. When learning how to trade the Forex market, start with only one or two currency pairs. It is very difficult to keep track of all four currency pairs simultaneously.
There are many ways to learn how to trade Forex. You can read books on how to trade Forex. A recent search on Amazon alone yielded 133 books on trading Forex. Though the least expensive way to learn Forex trading, it is also the slowest. Another option is to invest in an online course that offers training modules.
Even better is to purchase an online trading course with an accompanying mentor in a trading chat room who is not only a professional forex trader, but is good at teaching his craft. This is far better than joining a trading chat room alone, without an accompanying course, unless you have a lot of time to sit at a “wise man’s” feet waiting for scraps of knowledge to come to you.
This will be the most expensive option, but the best. Do your due diligence however. There are many people out there trying to take your money with offers too good to be true. Even those with honest trading rooms and courses may not match your learning style. Take advantage of free trials, ask the right questions, and remain objective when choosing a course.
If you follow this guide, stick to one or two currency pairs, and find the right course for you, you soon will be on the path to learning how to make your living in the Forex market.