How to Learn Forex Trading

by Contributor ; Updated July 27, 2017

How to Learn Forex Trading. High returns make foreign exchange markets (Forex) a very appealing investment option for some people. The high risk in currency trading can translate into substantial losses for even experienced traders. Learn as much as possible about how this industry works before you consider putting your money and possibly the shirt off your back on the table.

Step 1

Read about the basics of currency trading, along with the best options for most consumers at Bankrate, a trusted site with a wealth of money and investment advice.

Step 2

Find out about scams that are prevalent in this industry at the Federal Trade Commission (FTC) website. This agency makes regulations to protect consumers from unscrupulous dealers who promise everything and deliver zip. The FTC monitors the industry very closely and issues regular updates on important developments.

Step 3

Sign up for a free practice account at the Forex website. Make virtual currency trades using your free practice account for thirty days. Continue to follow the market as long as necessary for you to understand what you know and what you don't know.

Step 4

Get tips and tricks delivered to you mailbox by TopForexReview. Get news feeds or alerts on topics that may affect the currencies that you are considering trading. Start with only a few currencies, so you can keep track of changes and the possible causes.

Step 5

Join one or two forex traders forums and discuss the trends, problems and traps in the industry. Ask questions in the forums. Most users are friendly and helpful to newbies. Benefit from other people's experiences and develop your game plan before moving forward.

Step 6

Set aside a small sum of real practice cash over a one-month period. Use money that you have already allocated to discretionary income., such as savings from your morning coffee run (get regular instead of latte and pocket the savings), lunch for a month (you'll have to pack lunch) or break open your coin jar and cash in half (not all) at your local grocery change center.

Step 7

Select a reputable currency trading site or broker, after you evaluate recommendations from other traders and investigate them on the FTC website. Try to stick to your budget and the game plan that you made when practicing.

Tips

  • Even with a practice account, you should limit your trading to two-three currencies, initially.

Warnings

  • The best way to protect yourself and not lose your head is to reinvest only your forex earnings, not your household money.

    Scams in this industry are legendary. If it sounds too good to be true, pass. Currency trading, like the stock market, has many opportunities that are safe and profitable.