Traying forex trading for the first time may seem intimidating for beginners. We compiled this 5-step guide to help you get started:
- Education. Do your research and look for articles, videos, and webinars explaining forex trading after learning the basic jargon of FX like swaps, spreads, lot, bid-ask. Here at BrokerChooser we have lots of articles prepared for you in our ‘How to Invest’ section.
- Open a demo account and get familiar with charting and fundamental research. Many brokers offer demo trading accounts without any restrictions. Check out our regularly updated top list of the best forex brokers in the world, compiled by our brokerage analysts after testing the brokers' services with real money. Most of these service providers offer free demo accounts. After registering, you’ll have access to a trading platform with a virtual wallet. Feel free to make trades and experiment with all the features. It’s a good idea to trade the same amounts as you would with real money in order to get a feel for how you can tolerate swings in your balance. Using a demo account can be the best way to learn forex trading.
- Find the best broker for your trading style. Maybe you were impressed with the demo account and you are ready to go ‘real’, but if not, use our Find my Broker tool or this ultimate Comparison tool for a more refined search to find a broker tailored to your needs.
- Open an account and deposit (a small amount). This is really important – forex is a risky form of investment, don’t deposit too much! The bare minimum is often enough. If you are unsure about starting trading for real, don’t do it; stick with demo trading until you are comfortable with the risks.
- Do research and build your strategy. Get familiar with the economies of the currency pair of your choice. Build a strategy that you are comfortable with following – be it based on technical or fundamental analysis, or both. See some of the most popular forex trading strategies. Use risk management tools to avoid big losses ()i.e. stop-loss orders). Having a trading journal can also help you identify your strengths and weaknesses.
To help you get started with the forex jargon, we put together a forex trading glossary that contains the most often used technical terms in forex.
Real-life example of a forex trade