Trading on the foreign exchange market is attractive for many. Established online brokers such as Plus500, Avatrade or Admiral Markets have been found on the Internet for years. No wonder that in Germany alone more than 140,000 traders have now opted for active online trading. And the number of forex beginners is increasing. The foreign exchange market, also called forex, is currently characterized by a high level of liquidity, a huge trading volume and simple trading mechanisms. Beginners who want to learn the know-how of a private trader can get closer to their goal step by step. Anyone who decides to trade foreign exchange for beginners will have to do with buying and selling currencies in the future. This FX trading guide shows how the start can be best.
Forex for beginners offers the following advantages:
- Targeted use of highly liquid markets
- Already more than 140,000 traders in Germany
- Easy entry into Forex trading possible at any time
- Choose from a variety of established online brokers
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What is FX trading?
FX is short for Forex and stands for foreign exchange trading on international markets. Currency trading is a comparison of currency pairs. It is about the early recognition of the relationship between the currency pairs. The EUR / USD currency pair is still the most popular among Forex beginners. Trading can take place passively via a broker or actively via an online trading platform of an online broker. Common platforms are, for example, the MetaTrader 4, MT4 for short, and the Meta Trader 5. The Forex beginner has to find out which is the right Forex trading platform in the course of trading and gaining trading experience. Each trading platform has individual advantages. In addition to trading in foreign currencies, trading offers the opportunity to trade indices, stocks, commodities, ETFs, bonds or CFDs.
Depending on the focus of the trader, also known as a trader, a distinction is made between, for example, CFD traders, ETF traders and forex traders. Forex trading is still an easy entry point for beginners. Online trading is possible in stock exchange transactions and in over-the-counter transactions. The aim of Forex trading is to achieve the highest possible returns with the capital invested. With a trading decision, the forex beginner determines how the selected trading products will change within the specified period. If the Forex trader is right, his invested capital will be credited to the trader's account according to the return. The capital generated can now be paid out.
FX trading briefly presented:
- Trading in demo mode or with equity capital
- Convenient foreign exchange trading with MetaTrader 4
- Open a trading account with an online broker for free
- Have the generated capital paid out at any time
Open trader account and then what?
Opening a trading account is one of the easiest steps for beginners when trading Forex. Registration is usually free and only takes a few minutes. The contact details must be provided: the full name, a valid email address and a telephone number. Traders must be at least 18 years old. Many brokers can immediately activate a 100,000 euro demo account. As a rule, beginners trade Forex products with significantly lower capital investment. You can deposit money right from the start. However, beginners should first get to know Forex brokers before they decide to deposit money.
Many Forex brokers only allow full access to the website and the trading platform after registration and login. To really be sure that it is the right online broker and that the search for another Forex broker will not begin in a few weeks, testing in demo mode is recommended. Even with the demo account, the virtual capital used should correspond to the amount of your own capital used later. Depending on the online broker, the address, information about the profession and the industry as well as the level of training are requested in the course of registration. Queries on annual income or the origin of the capital intended for trading are also common. As part of the regulatory requirements for reputable online brokers, a confirmation email will be sent immediately after registration. An advisor will also call the phone number provided to authenticate the new trader over the phone.
Noob or pro?
When should you switch from demo mode to trading money?
Online broker offer provide their customers with initial information about Forex for beginners so that they can start trading straight away. The demo mode is one of the most important tools to get you started in the world of online trading. It can be activated after registering and opening a trading account free of charge. The step-by-step Forex strategies learned can then be applied without financial risk. It is advisable to test each additional strategy sufficiently in demo mode. The basis for successful currency trading is learning simple strategies and developing a trading understanding. What will move the trading markets and which trading strategies can best illustrate these market movements? Only when the forex strategies have been completely understood by the forex beginner should you trade with your own capital.
Most wrong decisions in forex trading occur when forex strategies are used too quickly and without sufficient practical experience. The majority of established online brokers offer their own guidelines for forex trading. In combination with the demo mode, solid experiences can be made without losing your own capital. The development of a good business understanding is ultimately essential for a successful start in Forex trading. Expectations regarding profit generation should also always remain realistic. In addition, there are the market phases, which sometimes make higher, sometimes lower profits. But a trader should also be able to deal with losses.
Which Forex strategy suits me?
This question should be answered by every Forex beginner. Because the choice of the right Forex strategy is closely linked to your own personality. A conservative Forex trader with a risky and impulse-based trading strategy would be badly advised. The forex beginner should clarify what type of trading he is. There are different forex strategies. One variant is to use the investment term. A distinction can be made between long-term investment and short and medium-term trading. The advantage of long-term based forex strategies is that the trader does not constantly deal with his trading decisions. Here fundamental analysis is recommended. Among other things, this includes the economic development of the financial product compared to its market value. Traders should continue to take economic trends and technological trends into account.
Trading tools can be automated. Alternatively, it is recommended that experienced traders follow and take over trading decisions. Online brokers like Avatrade offer the Trading Signals App or Copy Trading. The trade is called a trade and is described by opening a position. When the trading period is over, the position is referred to as "closed". A trading decision and chosen forex trading strategy should be based on sufficient analysis. Emotional decisions must not influence the trading decision. Accordingly, every strategy used should be sufficiently tested and understood by the forex beginner.
The right forex strategy is the first step to trading success:
- Act conservatively or risk-taking
- Perform a fundamental analysis before each trading decision
- Choose between short, medium and long-term trading decisions
- Adequate testing and learning of the trading strategy to be used
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What options are there to gain quick and good trading experience?
A good forex guide is almost as valuable as for real money beginners. Anyone who invests the time in learning and understanding trading decisions by experienced traders is on the right path in the long term. Online brokers now offer good to very good Forex guides. If you have any questions, a German-speaking customer service can often be used. With so-called social trading brokers, experienced brokers can also be contacted, similar to a mentoring program. Nothing beats learning from others. There are various options available from online brokers, such as a forex guide, forex books, forex e-books and forex guides. However, one of the most important rules of thumb when trading is: You should only start trading with real money if the capital is free.
Trading with Forex products is and remains risky, which is confirmed by experienced Forex traders becomes. By using the demo account, even inexperienced traders can familiarize themselves with the trading platform. For starting Forex trading, MetaTrader 4 is particularly recommended. This is a browser-based trading platform that is now also available as an app. The advantage of MetaTrader 4 is that this trading platform is very reliable and easy to use. Many online brokers offer their customers webinars in order to understand and start trading even faster using MetaTrader.
Online brokers are not just online brokers
The market Online brokers are difficult for beginners to understand at first. Online brokers usually offer a free learning area. If you do not have a good knowledge of English, you should definitely choose a German-speaking provider, this also applies to customer service. Not every online broker suits every trader. Therefore, a current Forex broker test should be used to choose the broker. When choosing the provider, for example, you have to pay attention to whether there are hidden costs when trading forex. This can be seen in the terms and conditions. This broker is not recommended if no information is given about possible costs in Forex trading.
Furthermore, the online broker should be regulated within the EU and have a valid license. From the trader's point of view, this means that potential financial bottlenecks in the brokerage company have no or only a limited impact on your own capital. A reputable online broker has a valid license number, such as that assigned by CySEC, the Cyprus Securities & Exchange Commission. For further security, observe the regulations of the Investors Compensation Fund, ICF for short, and MiFID II. The corresponding information can usually be found in the footer of the website.
This marks a serious online Broker from:
- Valid broker license
- Compliance with ICF guidelines
- Free registration
- No hidden costs when trading forex
What is possible with forex trading?
If you hope for quick money with forex trading or another trading product, you will already be with forex trading brought the first trading decisions down to earth. Hardly any other online business is more based on learning and applying experience. The constant achievement of profits is and remains the yardstick whether the trader is on course for success or should optimize his trading know-how.
The trading offer of securities is especially difficult for forex beginners to grasp. Asset classes, also called asset classes, make it possible to better understand the multitude. Asset classes are used to combine financial products with similar financial characteristics in an investment group. The best-known asset classes are foreign exchange, stocks, commodities and bonds. Forex trading is the most popular asset class. One of the reasons is that trading in foreign currencies is possible at any time, since an open stock exchange can be found at any time of the day.
Trading beginners usually decide to buy and sell foreign currencies during their first trading steps. One of the reasons is that the effects on foreign currencies are particularly easy to understand. The currency pair rates depend on the price level of the two countries, on the production process of the domestically manufactured products and on the buying behavior of the nationals. The central banks of the countries that have a medium to long-term influence on the development of the currency pairs have further influence.
Conclusion: The start of FX trading can be started at any time
The online Forex trading is attractive to many. However, many still shy away from the first step of starting currency trading. Forex trading has become very simple and transparent. First you have to decide which online broker the trading account should be opened with. Current online broker comparison tests help you make your decision. Then it depends on the decision whether to trade with equity or with demo money. If you want to start Forex trading under optimal circumstances as a beginner, you should take the time to learn and gain experience. Numerous webinars on forex trading can now be found here.
The reasons for starting FX trading remain varied: speculative trading, hedging or simply taking the chance of an additional income. Anyone who relies on generating capital to reduce debt will not be able to open a trading account with regulated forex brokers. The maxim here is to protect the customer from the possible risks of forex trading. Only capital that is not necessary for subsistence or outstanding liabilities should be used. It should not be forgotten that forex trading involves trading losses, no matter how good the market is. As soon as this happens, the trading strategy should be checked and the use of capital adjusted to the new situation. Good luck trading with Forex!
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