However, there is no doubt that once you master the techniques and become familiar with how the currency exchange markets work, you can expect to have massive profits that’s only you can dream of.
So, how does it all work? The first thing you need to do is to sign up for an account with a forex broker. There are many of them out there, however, you do have to be careful and find a broker that has a good reputation and is licensed in a country that it operates from. Once you have an account, you need to verify it. You usually have to submit proof of identification and proof of address.
With a verified account, you can start trading with the real money. However, if you are very new to this, you should not risk your money right away. Most, if not all, forex brokers offer demo accounts. They load your account with virtual money that you can use to trade.
Your goal is to study how the most profitable traders are doing it. Profiting from the currency markets takes careful technical analysis of charts that follow the movement of a currency pair.
How much you profit really depends on your familiarity with the currency pair that you choose. The most popular currency pairs are USD/GBP or US dollar and Great British pound, USD/EUR or US dollar and the Euro. However, there are actually many more currencies that you can choose from.
If you are totally new, you will want to choose a currency pair and study it for a time. A good practice is to look at the monthly charts within the last 12 months and see if there are any patterns. Then you can move to the current month’s movement and then to the daily movement within the week.
Currency pairs can be predictable in their movements, that is, if the economy of the two originating countries are stable and there’s no upheaval.
Technical analysis of currency pair movements is actually complex and it’s not something that you can master in a month’s time. This is basically the reason why most forex brokers offer demo accounts. You need to spend time doing technical analysis and practicing doing trades.
Most people though are impatient and would rather risk their money on forex trading even though they are not that experienced yet. For most of them, they cannot feel the real-ness of forex trading unless they spend some of their money. But this is actually a stupid way to trade. And we have seen people lose thousands of dollars that way. What’s worse is that they chase their losses by spending even more money.
Like anything else, you have to practice and practice until you master some skills. Thankfully, among traders, there are many out there who are willing to teach newbie traders.