Forex trading is the buying and selling of different currencies. It is conducted 24 hours a day having an average turnover of around AED 19 trillion according to 2013’s EconoMonitor. In the last decade, forex trading gained a lot of popularity in the UAE especially in Dubai, as the metropolitan city is the hub for forex traders and brokers.
The fact that you do not need a large investment or a fancy physical place to get into this business certainly makes it attractive. But this does not mean forex trading is easy or that anyone can become a successful forex trader in a fortnight, rather like every other business, it demands time, patience, knowledge and experience.
Here are the essential steps to become a successful forex trader.
Start With The Basics
- Phones and laptops- Unlike other businesses, there is no central market in forex trading rather all the forex exchange is carried out via phones, laptops and the internet.
- Currencies- There are six major currencies: American dollars, Canadian dollars, Australian dollars, Japanese Yen, British pound and euro. However, rests of the currencies are referred to as minors.
- Pairs- In a forex world, currencies are traded in pairs for instance; a currency pair can be JPY/USD. The first currency is always the Base currency; in this example, JPY is the base currency.
- Bid/Ask Rate- This is one of the key terms of forex trading. The Bid is the rate at which Base currency or its equivalent currency is sold. Ask is the price which the buyer is willing to pay to buy the Base or its equivalent currency.
Understanding The System
- FX Software- All deals are carried out on the FX software.
- Forex Signals- They suggest traders the correct currency pair and accurate price when they enter into a trade. Typically a forex signal is valid for an hour only. These forex signals are sent by financial institutions and major banks all over the globe.
- How to get a Forex Signal- To get alerts for FX signals, you need to subscribe to them. Human analysts who either send emails or texts on mobile phones to subscribers usually create these signals.
Finding A Broker
- A reliable broker- A broker works as a medium between you and the forex market. If you are an expert in forex trading, you do not need a broker, but if you are new, the broker can help you by pointing you to the right direction. Find a registered broker who has enough knowledge and experience. You can also go for a company to do so; this is your personal choice.
- Start with demo versions- Now you are well aware of the basic terminologies of forex trading, but it does not mean you should start trading right away. A good option is to start with demo versions. They are virtual programs which will make you understand how the system works. This way, you would not be wasting any money by making an illegal trade. Learn from the demo versions and step in the forex trading market with confidence.
Furthermore, be clear about your goals and objectives. Make a clear plan about what you want to achieve and where you see yourself in the coming years. By following these steps, you will be able to learn the art of forex trading and gradually become a successful forex trader in the World.