Forex for Beginners

Are You a Forex Beginner?

Find Out How to Get Started with Forex Trading

Today's job market offers little security for employees. For this reason many of them are providing for retirement by earning additional income online. Forex trading offers a business people can run from anywhere in the world with internet access. Furthermore, forex trading does not require a lot of startup capital, so beginners can start trading with little money and grow it into a nice little financial nest egg. This article discusses 3 important tips that will help any forex beginner become successful at forex currency trading.

Getting Startup Capital

Over the years I've found that the majority of people that are not familiar with trading or investing of any kind have the misconception that it requires a large sum of money to get started. Even though this holds true for some brokers, most brokers are pretty geared towards entry-level investors. There are variuos brokers that will let you start with as little as $200. There's even one broker called Oanda that allows you to start with a mere $50! I know times are tough for a lot of people but $50 is doable for everyone. If you're having problems coming up with this kind of start-up capital you could even sell a couple of things on eBay to get the ball rolling. Everyone has some old junk laying around and remember; one man's junk is another man's treasure. Once you have your capital to start trading you will need to choose a broker.

Success Begins with Choosing the Right Broker

There are two types of Forex brokers. The first is called an Electronic Communication Network or ECN for short. ECN's earn money by charging you a commission for all of your trades placed through them. The other type of forex brokers are called Market Makers. Market Makers may have an interest in seeing you lose money, because they can trade against you with counter-party trading. Opting to trade with an ECN can save you money in the long run and is generally safer.
Before depositing any money with any broker, do the necessary research on them. A good up-to-date resource is Google, just type in your broker's name plus the word "review" and look for forums or other places where site visitors have posted their feedback or vented their frustrations.

Develop Your Plan

After depositing your start-up capital with a broker of your choice you will have to come up with a trading plan. This "blueprint" will act as your road map to success and assist you in achieving your goals. This step is extremely important so be sure to spend enough time on it. Some of the components of every trading plan are financial goals, trading system, trading rules, and money management rules.

Trading as a business is not just a quick way to make money. The best investing advice requires investors to plan and prepare. Whenever you have a business, you have inventory. The inventory in online forex trading is your capital. Manage your capital well so that you can grow your inventory and "expand" your business. Following the rules will help anyone to grow financially in the realm of Forex trading.

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What is Forex?

FOREX = Foreign Exchange; currency trading

Forex, also referred to as 4X or FX, stands for Foreign Exchange. This is the name of the financial trading market that involves the trading of Currencies. The Foreign Exchange Market is made up of banks and brokerage firms who are connected over an electronic network that allows them to convert the currencies of most countries in the world.

Currency Trading - The Best Business In The World

From that headline you may be wondering what qualifies me to say that currency trading is the best business in the world. It definitely is in my own opinion though due to the lifestyle it so easily allows me to enjoy. There isn’t the hassle that you often get with so many other ways to make money either. There is also the flexibility that comes with currency trading as you can do it from anywhere you desire. You can also make money no matter what the economy looks like out there. I want to share with you some of the reasons why I think that currency trading is definitely the best business in the world!

Currency Trading Reason #1: Anyone can do it

Anyone can make money with currency trading. You do have to learn the basic skills involved but you can do it no matter what your background is. If you are tired of the commute to work as well as the 9-5 schedule then allow yourself to break free from it. You will feel happier than you have in a long time due to being able to decide when you are going to work.

Currency Trading Reason #2: You can do it from anywhere in the world

As I mentioned before you can do it from anywhere in the world. All you need is access to the internet and you can do it. You can do much more with your family than you have been able to do in the past. No more missed ball games because you can do your work when it fits into your daily plans. So if you want to go to the beach for the week do it! There isn’t anything to stop you any more!

Currency Trading Reason #3: Learn a Skill for Life

The skills you end up learning relating to currency trading will pay off in the long run. This isn’t any get rich quick scam or anything new. People have been doing it for a very long time. Currency will always be there too as a way for us to buy and sell things no matter which part of the world you happen to live in. You will be able to make money all the time with currency trading. You can control how much you make too based on how many hours you want to work. It all depends on the type of lifestyle you wish to enjoy.


I strongly encourage you to look into currency trading and what it has to offer. I have only touched on a few of the basic rewards it has to offer you here. Take the time to read more about currency trading and I think you will be motivated to get started with it. You can reclaim your life again by working when you want, making plenty of money, and being your own boss. Once you do so I am sure you too will agree that currency trading is the best job in the world!

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Forex Definitions, Terms, Abbreviations, and Acronyms

Here you'll find the most important definitions, terms, and abbreviations you'll come across in the Forex business.
If you're just setting your first steps into the world of Forex trading I suggest you check out the Important Forex Concepts Section first and bookmark or print this page for future reference.

FOREX = Foreign Exchange; currency trading
Forex, also referred to as 4X or FX, stands for Foreign Exchange. This is the name of the financial trading market that involves the trading of Currencies. The Foreign Exchange Market is made up of banks and brokerage firms who are connected over an electronic network that allows them to convert the currencies of most countries in the world.

Acronyms / Abbreviations
Term	Meaning
Forex	Foreign Exchange; Currency Trading
4X	Popular short-term for Forex
FX	Popular short-term for Forex
CDL	Candlestick Chart (Often used bar-chart in Forex Trading)
EZ	Euro Zone
FXCM	Forex Capital Markets
GFT	Global Forex Trading
LOTN	Live on the News
OCHL	Opening, Closing, High and Low
OFT	Ophir Forex Trading

Important Forex Concepts
Term	Explanation
PIP	Percentage in Point Refers to the very last digit of a currency price. Example: If EUR/USD is at 1.3149 and the buy price increases from 1.3149 to 1.3152 we have a 2 PIP increase. If the buy price increases from 1.3149 to 1.3199 we refer to this as the EUR/USD has increases 50 PIPs
See a few more at;	http://www.fxwords.com/

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3 Tips to Choosing the Right Forex Broker

Having read enough information on Forex it is now time to put your knowledge to the test and apply what you've learned. The first thing you'll want to do is establish a Forex account. To do this, select a Forex broker to place your trade orders with. Selecting the right broker however is no easy task. There are several considerations that need to be made when selecting the right broker for your Forex trades, such as dealing with high spreads, sufficient capitalization, and 24/7 service. There are other considerations as well, but let's focus on the 3 tips that can help you select the right Forex broker for you.

Forex Broker Tip #1 - Shop around to get the Lowest Spreads

Some brokers prey on new traders because they have no clue and are unaware of the fact that they can negotiate to get the special price they want. The spread, which is the difference between the ask and the sell price, is where most Forex brokers make their money. It's possible that some brokers may be more flexible on pricing when you want to open your account, depending on the amount of money you decide to open the account with. You can always ask about alternative pricing, and just go somewhere else if you do not like what is being offered to you. If the spread is acceptable, then you will need to obtain information on the broker and his/her capital outside of the client base.

Forex Broker Tip #2 - Check your Broker's Capital Requirements

Many traders are not aware that the National Futures Association (NFA) has a requirement that brokers must hold a portion of their capital in reserve. Brokers are also required to hold a portion of their CLIENT's capital in reserve as well. Every Forex trader needs to be aware of this requirement, in the extreme case that a brokerage firm shuts down. So should this ever happen, know that they will have a portion of your capital in reserve, and will owe it to their client (you). The NFA maintains a website at http://www.nfa.futures.org/ that lists this and other rules and regulations governing brokers. There is even a way to file complaints in cases of fraud or client abuse. A broker has an obligation to his clients but will not inform you of every single one, so only educating yourself to those obligations makes you a better client.

Forex Broker Tip #3 - Check if there's a 24 hour Helpdesk

This should be so obvious that I shouldn't even have to say it, but I'll say it anyway as you might not realize the importance of this yet. If your broker does not have a round-the-clock helpdesk, simply DO NOT sign up with them. How so? Since you will at one point or another experience platform issues and if they are not there to assist, you might loose all of your cash from one small technical bug. Believe me, I know what I'm talking about here, been there done that. When I was trading I found myself in a situation where I had gained over $4,500 in profit and the broker's platform froze on me... I had lost $500 between the glitch occurring and the time the help desk corrected the issue. And that was WITH the availability of a 24/7 helpdesk!

Forex trading, like all trading and investing, can be risky. While this risk adds a certain level of excitement, the key is to educate yourself and develop a relationship with a good broker. A good relationship, founded on open communication and diligent research into the broker and his firm will help alleviate some of the risk, protect your investment and help it grow.

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