How to Make Money Trading Forex For Beginners

What is Money

Money basically is a means of exchanging value. In an ideal world, unless you steal the money, you are only going to get paid if you provide some kind of value in exchange for payment. From the beginning of time, as people can remember, we had the trade by barter system, where people exchange item for item. We later went to gold and after that, paper money.

There are now debates as to whether cryptocurrencies or digital money is the next form of money and that’s the hot topic for today.

Inflation Is a Cause

Inflation Paper money was already a good enough medium of exchange, however, people started to see that it wasn’t an amazing store of value because of inflation. So the fact that people saw that they can’t just store money and keep it as a store of value, they started investing so that they can beat inflation and the value of their money goes up. This is why people invest, buy stocks, and cryptocurrency, and even do things like Trading Forex.

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Make Money From Forex Trading

Forex trading is a method of investing in the foreign exchange market. This market allows traders to buy and sell different currencies for profit. Forex traders must have the strong financial knowledge and be able to stay disciplined in their investment strategies in order to make money from Forex trading. Many people start forex trading as a way to make a quick profit, but some later turn to it as a way to make a monthly or annual income.

Is Forex Trading A Big Deal

There is no one-size-fits-all answer to this question, as the impact of forex trading on a given individual’s life will vary depending on their individual circumstances. However, in general, forex trading can be considered a very big deal, as it can generate a lot of money for traders and can also be a key factor in the overall success or failure of a business.

How Do I Start Trading Forex?

There are many ways to become a successful forex trader. One way is to get started with a forex broker. Brokers are companies that provide forex trading platforms and services to their clients.

Forex trading Image

Best Forex Broker includes:
FXTM Online Trading Platform
IG – Best overall broker, most trusted
Saxo Bank – Best web-based trading platform
CMC Markets – Excellent overall, best platform technology
Interactive Brokers – Great overall, best for professionals
TD Ameritrade FX – Best desktop platform, U.S. only
FOREX.com – Excellent all-round offering
XTB – Great research and education
City Index – Excellent all-round offering
Swissquote – Trusted broker, best banking services

Once you have signed up with a broker, you need to create an account and verify your identity. After you have an account, you need to deposit money into your account to start trading. You can also try trading forex yourself using an online forex trading platform.

Open a trading account with FXTM today and get $50

Currency Pairing

When you look at currencies in Forex trading, chances are, you’ve seen a currency written like this: where you’ve got USD/GBP or USDGBP. It’s called a Currency Pair and usually, the first currency written is in the Unit of 1 which means base or base currency, 1 being the base or lowest unit value while the next one is the interpretation of the quote, so that’s the quote currency.

So when you see something like BTC/USD or BTCUSD, it basically means 1 BTC is this many USD or 1 Bitcoin is this many Dollars. Here you can see that BTCUSD shows us that 1 BTC is 41,956 USD. In forex terminology, you’d say that this is a quote for BTC against USD. This quotation means that 1 BTC can be exchanged for 41,956 Dollars.

Trading World The Forex Market is way larger than the stock market. According to research, it’s around 6.6 Trillion dollars in daily trading volume (Data from 2019 Triennial Central Bank Survey of FX and OTC derivatives markets) . The Forex market is also known as the FX Market. People exchange national currencies on the market a lot for many reasons. Maybe it’s to hedge against inflation, to speculate on events going on within those countries for which they trade their currency, and to diversify their portfolios, alongside other reasons.

How Do You Make Money In Forex Trading?

Say you wanted to do a transaction on turtlenecks for instance and you don’t have turtlenecks and you know a guy that likes to wear turtlenecks all the time. If the price of turtlenecks on the market is $50 and you had some idea that they would go down in price, you can borrow one turtleneck from your friend that has a lot of them, and sell it to someone at $50 and wait for a bit.

Let’s say the price of turtlenecks in the city dropped to $30, with the $50 in your hand. You buy that turtleneck, the same one, and return it to your friend as if nothing happened. Meanwhile, you’ve made $20. This is what happens with the forex and stock markets. Except you’ll swop turtlenecks for currencies or companies’ shares and the friend you borrow from is your broker.

Can Forex Make You Rich?

There is no one-size-fits-all answer to this question, as the answer will depend on your individual circumstances. However, forex can often be a profitable way to trade, and if you know what you’re doing, it’s possible to make some money.

What Is The Best App To Trade Forex?

There is no single “best” app for forex trading. The best forex trading app will vary depending on your individual trading needs and preferences. However, some popular forex trading apps that may be good choices for traders include MetaTrader 4, MetaTrader 5, and TradingView. These apps are available on major forex trading platforms including FXCM, Interactive Brokers, and TD Ameritrade.

What Is The Best Time To Trade?

Forex is traded on 24/5 trading hours. That is, 24 hours, 5 days a week for regular currencies. So, starting at 12 a.m. on Monday and closing at 11:59 p.m. on Friday. Server time is EST).

Cryptocurrency pair trading is available to trade 24/7. They have server maintenance when trading cryptocurrencies is unavailable from 12:00 a.m to 2:00 a.m. on Saturday and 3:30 a.m. to 4:00 a.m. on Sunday. Basically, you have 24/7 to trade the following currency pairs.

BTCUSD; ETHUSD; LTCUSD; XRPUSD; BCHUSD Once that is done, I’ll get a couple of options, and I can see my Leverage options. So what does this mean? Leverage Trading Forex cannot be done without the broker lending you money. If you deposited say $100, you can’t instantly trade Forex with it technically.

Summary

If you’re a really competent currency trader, forex trading could make you wealthy. However, rather than being an easy road to riches, forex trading may be a rocky road to massive losses and potential penury for the average retail trader.

It is important that I mention that the large percentage of people trading in the FX markets are actually institutions. These are Central Banks, Commercial Banks, and Hedge Funds while individual traders or retail traders, people like you and me are quite a small percentage of the Forex Market and use FX trading for day trading activity.

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