Forex investors trade currency from everywhere. People usually choose to become forex traders because they enjoy the excitement of taking risks and seeing them pay off.
If you want to work in a fast-changing environment where the job and pace always vary, being a forex trader might be a thrilling and profitable career decision.
According to some, the current worth of the forex market is a staggering $2,409 quadrillion, with a daily volume of $6.6 trillion.
A forex trader can be anyone – from independent beginners who profit directly from their trades to professionals who work for a group of clients or a financial firm doing the exchange.
Before jumping into it, let’s see the things to know to start trading from your home.
1. Your First Trade in Forex: Find a Broker
There are some steps every trader should take before entering the FX market.
The first thing a forex trader should do is look for a brokerage. Luckily, you can now do a simple search and find the best forex brokers quickly and easily. These can help you study the basics of this business.
Your next step is to sign up for a trading profile with the broker and start funding it. If you’re unsure of your trading skills, starting with a demo version is good. This way, you can try several strategies and see which suits your needs best.
Once you’re certain that forex is what you truly want to pursue, download a trading platform and start exchanging.
2. Forex Terms You Need To Know
Before everything else, you must have researched the market and strategies, conducted a full forex analysis, and set your goals straight. But everything would be meaningless if you didn’t have the needed vocabulary.
So, let’s go through some forex terms and facts to help you start this journey.
The FX market is where you’re entering the trade. This is the place where investors from everywhere exchange currency pairs. Interestingly, the FX market doesn’t have a central location – it’s all conducted electronically on various FX exchanges.
As mentioned, the FX market works on trading currency pairs. The most famous one is EUR/USD, but many others exist. Considering the number of currencies worldwide, the variations of pains are endless.
Nevertheless, today, investors mostly go for USD/JPY, USD/CAD, AUD/USD, and many more.
This is the time during which the FX market is open. This particular trading market works 24/5, meaning it rests on the weekends. During this time, you should brush up on the previous week’s happenings and devise a strategy for the following.
If you’re planning on FX trading (regardless of the location), this is a term you must know. Pips are essentially the smallest unit of measurement used in forex. Usually, this is the last decimal on a currency’s price.
For example, if a USD/CAD pair goes from 1.5032 to 1.5034, the rise of .0002 is two pips.
This is the disparity in the trade rates when selling and buying. Simply put, the spread tells you how much you can gain or lose with a trade.
Remember that these are just a few basic terms every forex trader must know. The sooner you learn them, the better and easier your trading journey will be.
3. Analyze and Strategize
Finally, as we said before, once you know the basic terms, you should start diving deeper and analyzing forex trading and learning some strategies.
Forex market analysis is tracking how the currency pair value moves. It’s looking for various factors that can influence the pair. For example, an economic crisis in one country can significantly impact its currency’s value.
After the analytical part is done, you can browse several trading strategies. Depending on your preferred trading style, these can help you make short- or long-term trades.
Conclusion: Trading From Home
In general, because of the liquidity, the FX market is deemed more profitable but, at the same time, risky. So make sure you’ve done your research.
Once you have learned the terms, opened an account with a broker, and downloaded the platform, you can start trading freely on the FX market. Contrary to the general opinion, trading on the currency exchange doesn’t require big starting funds. Sometimes, you can start trading for around $100 (excluding the fees you pay to the broker).
Many see trading as a full-time job, but thanks to technological development, you don’t need to spend hours before a screen following trades (unless you’re day trading). You can use many strategies or even automated services from your broker that can aid this.