A Guide on How to do Online Forex Trading in 2023
Online forex trading is not that hard if you know what you are doing. Today, we talk about online forex trading and online currency trading the things you need to know, to get started . We will talk about some of the concepts like price action and other details that will make your forex online activities, simpler.
There is very little about online currency trading that is simple. However, you can get started and make money if you have the right knowledge.
We want you to keep one thing in mind. This article is not a definitive way for you to learn all you need to know to be a good trader. It is just a segue into the concepts you will need to learn in great detail.
Think of it as an introduction to online forex trading.
The forex market is a decentralized global market where all the world’s currencies are traded. It is the single largest and most liquid market in the world, moving about $5 trillion on volume, every day.
If you combine all the world’s stock markets, they do not even come close to the kind of volume experienced in the world of online forex trading. So, what does this tell you?
Well, the takeaway is that if you look closely, you will find opportunities to make some money here.
However, how do you get into the online currency trading market, and how do you begin to trade?
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What Can You Trade Online?
There are many things that you can do, besides online forex trading. They include:
With all these options, it is all a matter of finding where your interest lies and then focusing on that until you master it. For a long time now, forex and stocks have always taken the lead as the most popular instruments to trade online.
Most of the time, the brokers will offer a product range that includes a variety of forex and stock instruments. You will also find a large selection of educational videos, articles and books that are related to online forex trading.
What you must understand is, you can never thrive in forex online if you do not have the proper knowledge is takes to understand things like leverage, how to make market orders and price action, among others.
We have a complete list of the best forex brokers in our forex broker reviews that we think you should read, to get all the information you need about picking the right broker to work for your interests.
Who Is Eligible For Online Forex Trading?
There are two questions to answer to know if you are eligible for online trading;
- Do you have an internet connection?
- Do you think you can learn how to trade?
If you answered 'yes' to these questions, then you are eligible. It is that easy, but the forex education might not be such a cakewalk. There are several brokerage firms online that have made it easy to trade from your PC, mobile phone and on web browsers.
With the improved technology that we see every day, the complexity of online currency trading has diminished. Doing forex online now is easier because there are options that do not even require you to know how to analyze the market for price action or read charts.
The forex online market has become accessible to anyone who wants to make money. You will not need to have any special qualifications to get started in online forex trading.
What Do You Need To Have, To Get Started?
Before you can start your online forex trading activities, you will need to get a trading account from a broker. Let’s run down the steps you need to take before you can consider yourself ready to trade:
- Forex Education
Before you start reading our forex broker reviews to find the best forex broker, you should not skip the first and most important step; learning. You have to know what you are doing. There are several websites, including ours, where we offer free forex education for all those who need it.
With forex education, you will learn how to read charts, understand price action, analyze the markets and decide to place you in the right position to take profits.
Forex education is what will allow you to easily get into forex online and thrive there. You should never substitute a good education with anything else. Most people will skip this step and tell you that online currency trading only needs you to get an account with a broker and get started.
Nothing is ever that simple. After you have all the education needed to give you a good grasp of what you are getting into, we move to the next step.
- Read Our Forex broker reviews
In this stage of your journey to online forex trading, you will be looking for the best forex broker who will cater to your needs. You will be looking at accounts that are as close to what you want as possible.
The best thing you have to gain when you pick the best forex broker from our forex broker reviews is access. You need access to many instruments, good information, data security, fast execution speed and many more.
After you have finished the forex broker reviews, you will be able to pick one that will offer you access to a trading account that is suitable for your needs.
- Open a Trading Account
In this part, you will have picked the broker you think is most suitable for online forex trading and then pick an account that is suitable for you. They charge differently. Some of them use spreads, other use commissions and others have no spreads and just commissions.
It is a matter of looking for a way to do online currency trading without using too much money. Lower the cost of your operations, and you will be fine. However, the object of your search should not be to look for the one with the lowest offer.
That is a good way to get scammed. The search should be focused on looking for the most competitive and fair prices, without sacrificing the features you need, to be effective as a trader.
- Download The Trading Platform
After you have signed up with the best forex broker you can find in our forex broker reviews; you will then have to download the trading platform and get familiar with it. The process of installation is an easy one:
- Click on the download link provided in the website where you signed up
- Open the .exe file you will receive and follow instructions to get the installation properly done
- Open the app after installing and start your next steps to online currency trading.
After you download the trading platform, you get started on your demo trade.
- Demo Trading
We think that it is always a good idea to use the opportunities that you get to learn, to make yourself better before you start online forex trading officially. Here’s what happens when you sign up with a broker.
Before you get started, you are given access to a demo trading account that has everything. These are the characteristics you can expect:
- The demo account will have all the charting tools you need
- The demo account will give you real-time market data.
- You will be able to access all the tools available to any trader in the world to trade.
- The currency you will be using in the demo is virtual.
With all that in mind, you know for a fact, that you are not going to be losing any real money. So, this is an opportunity to learn to chart, the effects of price action, how to position yourself and exercising of the knowledge gained in forex education.
After a while, you should be able to come up with a strategy that works.
- Transitioning to Real Money Trading
Trading in the demo will let you know if you have weaknesses in the approach that you want to take in your forex online activities. You will learn how to minimize risk and use leverage properly, while keeping a close eye on the price action, to make everything coalesce and work together to make you money.
Transitioning from demo to real money online currency trading, will happen when you have been on the demo for long enough to learn what to avoid and what to do. At this point, you understand what price action does to the market.
You should start small, using an account that is most suitable for your needs. The best way to know what is suitable for your needs is to know what kind of trader you would like to be. There are four types of traders, and their requirements vary. We have:
- Day traders
- Swing traders
- Position traders
Some of the accounts would be suitable for a swing trader but not a scalper. Choose the one that will make your forex online activities, easier to do.
As always, be cautious. Do not be in a rush to make too much in a short time. Emotions should never dictate what you do.
How Do You Open A Trading Account?
The process of opening the account is not hard. You can get started on online forex trading with ease. Once you have finished reading our forex broker reviews and chosen the best forex broker for you, you can then move on to the registration part.
The registration process is quick and easy to follow. If you are opening the demo trading account first, you will need to provide basic information like your name and address.
When you get to the part where you want to open the real trading account, you will be required to give more information and proof of identification. This is normal procedure in all the KYC guidelines that dictate the process.
Once the registration is confirmed, you can launch the broker's trading platform and start your online forex trading.
How Do You Choose The Best forex broker For Your Trading Needs?
When you are picking the best forex broker for your needs, there are a few options you can use. They include:
- Reading our forex broker reviews where we get deep into the details.
- Researching for yourself on the internet
- Getting referred by someone you know and trust
We prefer the first one, not because we have the information for the best forex brokers in our forex broker reviews, but because we know for a fact how that information was compiled. Most of it took months to piece together. We get into the details that are hard to find using a simple Google search.
If you do not have the time to search for a broker yourself, you can save some time by going over the forex broker reviews and choosing one of the best forex brokers, to get started in your online forex trading.
Forex Broker Regulation
The most important parts of the process of picking out the best forex broker, is looking to see if they are regulated. Most people do not know how to do that. The regulatory bodies have websites where they list all the brokers who are regulated under their purview.
You should know the regulatory bodies by now. Some of them are:
- Financial Conduct Authority (FCA)
- Australian Securities and Investment Commission (ASIC)
- Cyprus Securities and Exchange Commission (CySEC)
Regulation exists to protect you as the client. The brokers who have a license are compelled or obligated to operate under strict guidelines and measures that ensure your money is always safe.
The authorities who regulate the brokers have international standards that some of the regulators may not share. It is always imperative that you check to see if the regulation body governing a broker is legitimate and accepted.
Trading Platforms, Tools and Instruments
You should be provided with the platforms that you are familiar with. They include MT4, MT5, cTrader, IRESS and others. You should be able to access them on PC, browsers or mobile devices.
As for the tools, you will need to have everything that makes your analysis easy. They can include charting instruments, news alerts and economic calendars.
When it comes to the trading instruments, having access to as many of them as possible, is imperative. It will allow you to diversify and minimize risk by avoiding the pitfall of putting all your eggs in one basket.
To Wrap Up
There is a lot more to learn when it comes to online forex trading. You should understand concepts of leverage, price action and execution models, to ensure that your forex online activities are clear to you.
In online currency trading, you will not need a lot of money to get started. A few dollars will do. It all depends on how much money you are comfortable risking.
You will be ready to get started after you finish your forex education and try out the demo to come up with a strategy that works. As always, to get the best forex broker, our forex broker reviews will be there for you.
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