While Forex trading has been around for a while, few people are acquainted with what it really entails. How it works: Forex trading deals with buying and selling international currencies (always in pairs) on a trading platform.
It commonly involves the US dollar and the Pound which are the most widely accepted currencies.
Traders make profits from fluctuations in exchange rates between currencies, speculating on whether one currency’s value, like the pound sterling, will go up or down in relation to another, such as the US dollar.
John Warue, a professional Forex trader at Citadel Forex Institute shares some insights on forex trading and a few things to take note of as a beginner.
1. Have a laptop/desktop computer
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This is the main tool you need to have if serious about undertaking this hustle. By having your own computer, you are able to acquire training on the online business without breaking a sweat. It will also aid in observing daily trends that are crucial to the business.
As a beginner, you will need training because it takes a keen eye to analyse world trends and make the right bets.
Some of the accessible Forex trading sites that one can use are MT4 (Meta Trader 4), Citrader and Trading Station which simply function the same as the platforms for online trading.
2. Know the dynamics of the market
This includes the right and wrong time to trade. With features on the platform which guide one on when to place orders, exit the market, execute orders, one can make the best out of their investment and smile all the way to the bank.
3.Have capital of at least $100 (Sh10,000)
If done right, one can make up to Sh1,000 in terms of profits from trading daily. If well managed, online Forex trading can become a main hustle for anyone who is keen.
With a diligent eye on risk management, one is able to minimise on the losses that might occur during the trading process since the trade is volatile.
4. Know what is happening in major economies
Be on the lookout for major markets like United States, China and Europe. These economies are sometimes in trade wars with each other. Interpreting this can reduce the risk of losses or increase the chance of gaining massively from trading at the time.
For instance, Trump talks on China influenced both currencies. Theresa May’s exit from office affected the pound greatly. Its value dropped. So at the time of the latter scenario, a professional trader shouldn’t have placed his/her money in the trade.
5. Know how exports and imports affects currency
You do not want to trade carelessly without knowledge on how import-export business works. Currency weakens when you export little and vice versa. When imports are higher than the exports, the currency weakens as a result.
On this, also know:
What is happening in the export and import business of major economies of the world.
How gold, oil, trade metals, international cocoa, twitter trends and major precious stones and products are performing daily.
6. Beware of the dos and don’ts
As a forex trader, you must be alert on the advantages and disadvantages of online forex trading.
One can make a lot of money if they understand the work properly. On the downside, it can be a bit like gambling your hard earned money if you don’t know what you are doing.
Trading platform is affordable and open from Monday to Friday for 24 hours daily. There are four trading sessions: London, New York, Tokyo and Sydney.
